Home furnishing retailer IKEA has announced total sales of £1.4b in the UK for the financial year ending 31st August 2014, an increase of 11.3% on the previous year.
Following an ambitious pledge last year by UK country retail manager, Gillian Drakeford, to double turnover and market share by 2020, this year’s double-digit growth shows strong movement towards this reality, with market share also growing by 0.5% to 7.1%.
Commenting on the results, Gillian Drakeford says: “We are delighted to report such positive growth here in the UK for the third year running. What is really encouraging is that this growth has come from our existing business, not relying on a bricks and mortar expansion programme. Over the past year we have been focused on really understanding how our customers live at home here in the UK, and presenting our unique product range in a relevant and inspiring way in each of our stores. We have continued to invest in making it easier for our customers to shop with us and are thrilled that these investments have resulted in another year of fantastic growth.”
Investing in the in-store shopping experience
Over the last three years, a number of investments have been made to improve the in-store shopping experience for customers and to make IKEA’s home furnishing offer more relevant to local customers.
Following a £4m investment in 2013, the children’s and living room departments continued to see growth in 2014, with sales rising by 17% and 11% respectively.
In February 2014, IKEA launched a new kitchen system, METOD, an innovative modular system offering unlimited design options. An £8m investment was made to introduce the new kitchen concept, including rebuilding kitchen departments in all stores and training co-workers to deliver a new, more convenient service to customers.
Over the past year bedrooms and bathroom departments have been refreshed, in preparation for a key focus in these areas this financial year. This investment includes the addition of UK standard bed, mattress and linen sizes to the existing bedroom range. An immediate increase of 21% for bathrooms and 10% for bedrooms has already been seen, in comparison to financial year 2013.
A further 250 visits were made to customers’ homes in the areas around IKEA stores to understand how people are living in their homes, their challenges, needs and dreams. The knowledge gained in these home visits was used to redesign the display room-sets in the kitchen, bedroom and bathrooms departments, showcasing the IKEA range with local customer relevance.
Online growth continues
IKEA continues to see strong growth in online sales, with a 26.8% sales uplift in 2014, following double digit growth the previous year.
“Our online business continues to be a driver of growth here in the UK and now makes up 10% of our overall sales. We are excited to see that this is not at the expense of our stores, in which we had a 5% increase in visitors over the past year,” says Gillian.