21 June 2024, 21:51
By Furniture News Oct 14, 2022

IKEA sees growth as consumers feel the pinch

Inter IKEA Group has shared the IKEA retail sales for FY22, ended 31st August.

Total IKEA retail sales amounted to €44.6b, a YoY increase of +6.5% (+3.5% when adjusted for currency impact), as rising inflation and squeezed consumer purses drove more customers to shop from the value brand. 

“This year’s challenges continue to give us perspective into people’s life at home, our business and our priorities," says Inter IKEA Group CEO, Jon Abrahamsson Ring. "Homes now fulfil more functions and solve more problems than ever before. That means people need home furnishings and solutions at an affordable price."

IKEA store sales grew by +13% compared to FY21, when many stores were closed due to the pandemic. Overall, the stores welcomed 822 million visitors in FY22 compared to 775 million in FY21, says the retailer. 

Store sales in FY22 grew mainly in Europe, where FY21 lockdowns were most severe. At the same time, online sales were -10% lower YoY, though they stabilised at a higher level this spring.

IKEA's online channels hosted 4.3 billion visitors, down from 5 billion last year.

The retailer says pandemic limited growth in FY21, and that IKEA retail sales benefited as the world reopened. On the other hand, inflation and supply chain issues impacted FY22 sales, and led to rising costs and higher prices. That means sales have grown in value, but sales volumes have not kept up. In addition, supply chain shortages made it difficult to keep the shelves full.

“IKEA prices remained relatively stable for several years," Jon continues. "That gave us an advantage when competitors raised prices early in the pandemic. Unfortunately, we can’t ignore surging raw material and transport costs. Long term, we remain committed to affordability for the many people around the world.”

The continuing war in Ukraine has also affected IKEA customers and the business. IKEA continues to scale down its presence in Russia, with "full consideration" for the many co-workers, partners and suppliers there.

In contrast to these scaled-down activities, IKEA opened retail operations in new markets, including the first IKEA store and online channel in South America. IKEA Santiago de Chile opened on 10th August, and South American expansion will continue with Colombia and Peru in the coming years. The Philippines also became a new IKEA market, and the first IKEA stores in Estonia, Puerto Rico and Oman opened their doors. In total, 38 new IKEA sales locations opened around the world in FY22.

As always, IKEA stores launched several new products as well. These include the ÅBÄCKEN water nozzle, which provides an affordable solution to help customers cut down on water usage at home, while the iconic BILLY bookcase returned this year, and can now be disassembled and reassembled as needed.

The new bookcases also use paper foil instead of veneer, and use less plastic compared to previous versions. BILLY is just one example of an IKEA product that avoids unnecessary material consumption. Other examples include LACK tables and the PLATSA storage system, which use lightweight constructions. IKEA says recycled wood will play an even more important role going forward, and that its products will continue to include more and more recycled materials such as aluminium, plastics and textiles.

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