IKEA annual sales slump 5% on weak housing market as company commits to price cuts

IKEA annual sales slumped 5% as consumers pull back on furniture purchases amid a weak housing market, according to an earnings report released Thursday.The Swedish home decor retailer has slashed prices and committed itself to making more price cuts in the future in an effort to win back cash-strapped customers.Ingka Group, which owns most IKEA stores globally, reported 39.6 billion euros, or $43.3 billion, in sales for its fiscal year 2024 which ended Aug.31.“In all our markets we experienced a slowdown of the economy and a slowdown of the home furnishing industry, almost simultaneously,” Ingka Group CEO Jesper Brodin said.

“We never experienced anything like that since 2008, to be honest.”IKEA started cutting prices after seeing a drop in store visits and sold quantities.The more affordable prices improved store traffic and the amount of products sold, Brodin said.“We are in times when dreams and needs for a better life at home are greater than ever,” Brodin said in a statement.

“At the same time, inflation and interest rates have impacted on people’s wallet and when times are challenging for people, we want to support in the best possible way.”Ingka Group said it invested around $2.3 billion in price cuts. Its share of the global home furnishing market stayed mostly unchanged at 5.7%, it said.The company expects to see a boost in sales next year thanks to lower interest rates in countries around the world.The Federal Reserve slashed interest rates in the US in September for the first time since 2020.Analysts previously told The Post that it will likely take about 90 days for consumers to feel relief from those rate cuts in their mortgages.

Subscribe to our daily Business Report newsletter! Please provide a valid email address.By clicking above you agree to the Terms of Use and Privacy Policy.

Never miss a story.When those effects take hold, IKEA hopes the rate cuts w...