IKEA UK has announced continued growth, with sales up +11.9% YoY for the 2023 FY, generating a turnover of £2.46b.
This performance, during IKEA’s 80th anniversary year, came as the wider Ingka Group announced global retail sales of €41.7b, an increase of +5.7% on FY22, and significant investment across its biggest markets, including more than €4.5b in the US, UK, France and Spain alone.
In the UK, 38.5% of total sales were made online (35.8% in FY22). As it saw the popularity of online shopping continue to grow, IKEA UK opened a multi-million-pound distribution centre in Dartford, with the capacity to deliver one million orders annually. Enabling faster and more sustainable home deliveries to customers in London and the South East, the centre is operated by 100% renewable energy and operates a fleet of electric vehicles to fulfil orders, driving a significant reduction in CO2 emissions. Long-running environmental sustainability initiatives were also the focus of investment, including £4.5m in EV charging infrastructure to enable 100% zero-emission deliveries by 2025.
In the North West, three Plan & Order Points (smaller stores dedicated to kitchen, bedroom, and living room planning) in Aintree, Stockport and Preston improved access to free planning support. Increasing the retailer’s physical access to its customers remains a priority, with the retailer stating an ambition for further locations in the North West and beyond, to open in FY24 – in addition to the opening of a new London store on Oxford Street.
In all, FY23 saw one million new visits to IKEA UK stores - an uplift of +2.2%.
A range of new services were also introduced, including 15 external locker pick-up points in collaboration with Shift (bringing the total to 24), and the trial of 12 mobile pick-up points across the UK, in collaboration with Tesco.
In the digital space, IKEA has increased capacity and capabilities to meet its customers remotely, be it online or over the phone, resulting in a +24% YoY growth in remote sales.
Peter Jelkeby, CEO and chief sustainability officer, IKEA UK & Ireland, says: “Over the past 80 years, we have developed our offering, value chain and sales channels, supporting our vision to create a better everyday life for the many people. As we look back on the last year and forward to the next 80, we constantly ask ourselves, how what we do today can be done better tomorrow. Over the past year, we have made significant investments on this journey to create a more accessible, affordable and sustainable IKEA, to meet the evolving needs of UK households.”
With many customers continuing to work remotely, demand for a more organised life was clear. Sales of IKEA’s adaptable PAX and KOMPLEMENT wardrobe systems increased by +49% and +39% respectively, with sales of the modular and customisable BESTÅ storage system growing by +25%.
In an acknowledgement of their ability to help save money and create a more sustainable life at home, IKEA’s People and Planet Positive range also performed well. In FY23, sales of PPP products increased by +42% YoY, representing almost a third (31.8%) of overall sales for FY23, compared to a 24.6% share in FY22.
Food waste was a key priority for customers, with sales of IKEA’s 365+ food containers increasing by +41%, as KORKEN storage jars and reusable bottle purchases grew by +23%.
Health and wellness trends also impacted purchases. The last 12 months saw the sales of air purifiers almost double (+88% YoY).
Peter continues: “Despite economic and geopolitical instabilities, we remain committed to making a positive difference in our customers' lives – especially for those with the thinnest wallets. Knowing that our customers continue to navigate a cost of living crisis, we absorbed significant cost increases to mitigate price rises as much as possible, investing in promotions, special offers, and, for the first time, an Easter Sale. As we see supply chain costs start to ease, we have a clear commitment to lowering prices accordingly - ensuring we remain firmly on the side of the many people.”
IKEA UK also continued its commitment to support employees. A £12m support package was rolled out across the FY, and salaries were up +6% on average in January 2023, in a move that matched new Living Wage Foundation rates. Staff incentives such as travel season ticket discounts and free food options continued throughout the year, and their discount rate doubled (from 15% to 30%) across a range of more than 2000 People & Planet Positive items.
Peter concludes: “As we look back on a strong, though challenging year, I’m incredibly proud of our co-workers’ dedication and efforts. With our strong culture and performance mindset, we have a clear road ahead of us – to assemble a better future, together, by continuing to adapt, innovate and transform – meeting the needs of both people and the planet in the years to come.”
