Ikea cuts prices as demand weakens

Ikea price cuts cover hundreds of products across Europe at a time when rising living costs are stretching household budgets. The company said revenues have fallen over the past two years, and it hopes the move will revive weaker spending on furniture and home improvement.

Ikea has set aside €1.2 billion for the discount program, saying price reductions on some products will reach 28%. Items getting cheaper include the Billy bookcase and Kallax storage units.

Margin pressure acknowledged, savings to come from the supply chain

Ingka, the franchise group that operates most Ikea stores in Europe, said the move is “not a short-term campaign.” The group said the lower prices will be financed through savings in the supply chain and packaging costs, while acknowledging that profitability could be hurt.

Ingka chief executive Juvencio Maeztu said many consumers are struggling with spending on home goods because of higher living costs. The company said demand for storage and organization solutions remains strong, especially among customers living in shared housing.

Price cuts vary by country

The discounts are not the same in every market. In the UK, the Kallax shelving unit has fallen from £60 to £49, while the Billy bookcase has been cut by £10 to £25.

  • Hundreds of products across Europe have been added to the new price list.
  • The biggest discounts are concentrated in core shelving and storage categories.

New channels expand as consumer confidence stays weak

According to European Union data, consumer confidence remains close to its lowest level in around three years despite a modest recent recovery. The backdrop suggests that high inflation and living costs continue to weigh on retail spending.

Alongside price cuts, Ikea is opening smaller stores in city centers to broaden its customer base. London’s Oxford Street and Brighton’s Churchill Square are among the examples of this strategy, while the company also launched its own second-hand online marketplace in 2024 to compete with platforms such as eBay and Facebook Marketplace.

With more than 500 stores worldwide, Ikea has cut prices several times in recent years. But the company’s latest financial results also show that such steps can put pressure on revenue and profit.