IKEA has announced its FY23 year results, highlighting growth following major developments in its ongoing UK transformation plan to become more accessible, affordable and sustainable.
Overall, IKEA delivered +11.9% growth in sales and a turnover of £2.46b, supported by increases across in-store visitation (+2.2%), online sales (+19%), remote sales (+24%) and click-and-collect purchases (+48%).
The retailer’s performance reflects continued investment in a more accessible offer through the introduction of Plan & Order Points (smaller stores dedicated to kitchen, bedroom and living room planning) in the North West of England, alongside a new mobile collection service that is being rolled out nationally in partnership with Tesco.
Peter Jelkeby, CEO and chief sustainability officer, IKEA UK and Ireland, says: “In our 80th year, we can be proud of our performance. FY23 was a year in which we improved our customer experience, grew our market share and continued making meaningful investments in our business and people.”
Investments in logistical operations were also essential to IKEA’s performance in FY23. As well as enabling faster and more sustainable deliveries, the opening of a multi-million-pound CDC in Dartford (pictured) resulted in increased fulfilment and cost efficiencies, alongside growth.
At the same time, IKEA has been investing in cost transformation projects focused largely on improved energy and waste management. Despite inflationary pressures in FY23, IKEA decreased its operating cost ratio to 27.8% (from 29.1% in FY22), positively impacting operating profitability, which grew to 4.5% of total turnover (2.3% in FY22).
Peter continues: “Having overcome challenges posed by Brexit and Covid, we have since focused on a creating a more efficient organisation and improving our profitability, which gives us the financial strength to continue investing for generations to come. Despite a difficult economic climate, our focus remains on new locations, new store formats, and in new services.”
As the cost of living crisis continued to impact customers, IKEA saw a clear pattern emerge. In response to economic strain, customers sought durable solutions that enhanced the dual role of the home as a sanctuary and a space for work and leisure activities. The importance of storage across the home was reflected in sales of IKEA’s adaptable Pax and Komplement wardrobe systems, which increased +49% and +39% respectively, with the Besta storage system growing by +25%.
IKEA also announced its first patent pledge, on Anchor and Unlock, an anti-tip-over safety measure launched across its Vihals range.
Staff benefitted from a £12m support package, with a £35m investment announced for FY24, while IKEA also established a partnership with homelessness charity Shelter, advocating for the development of 90,000 social houses each year by 2030. The retailer also raised £48,786 for LGBTQ+ charities.
IKEA continued to make progress towards its ambitious sustainability goals, supporting the retailer’s commitment to become climate positive by 2030. To that end, it launched a new mattress removal and recycling scheme, and announced a £4.5m investment in a national EV charging infrastructure. A total of 52,380 pieces of furniture were traded through IKEA's BuyBack & Re-sell scheme, while more than 500,000 free spare parts were provided to help customers prolong the life of their products.
Peter concludes: “As we look to the future, we are proud to have kickstarted 2024 by lowering a significant volume of prices, with more to come – underscoring our commitment to being on the side of those with the lowest means. Guided by the foundations set out 80 years ago, we'll continue building a business that contributes to better homes for our customers, better lives for co-workers and communities, and a better planet for all.”
