Increase in Chinese middle class boosts Ikea sales

The Swedish company has reported an increase of 3.6% in sales, compared to the previous year, boosting its revenues to €29bn, compared to €23.2bn.

The company now runs 315 stores in 27 countries worldwide, and it would appear that shoppers have become accustomed to its confusing store setup and the frustration of having to assemble its flat-pack furniture. Ikea is planning to open its first stores in India and South Korea.

China has eight of the largest Ikea stores and has become the fastest-growing market for the furniture dealer as migration to cities creates a middle class with sufficient money to spend.

According to Ikea, its business has seen good sales performance in North America, where the economy appears to be improving.

Europe is responsible for about 70% of the company’s total turnover and sales have improved in this region, but the company is preparing to face more challenges due to the flat economic growth in the region and pressures from deflation in the offing.

The group is set to face an economic decline in Russia, one of its main developing markets, which accounts for 7% of their overall turnover. This area is experiencing consumer spending slowdown due to the tension in the international arena.

The firm stated that both store visits and online shopping was increasing and more information will be made available when they publish their annual report during the first part of next year.