Ingka Group CEO says chain accepted lower margin to keep stores affordable
IKEA is cutting prices 15% to 25% on more than 1,500 products in Europe as the Swedish furniture group seeks to attract customers still feeling pressure from elevated living costs. The price reductions, announced Tuesday, take effect immediately and come after IKEA invested heavily last year to bring prices down on thousands of products across markets.
Ingka Group, which owns most IKEA stores globally, other IKEA franchisees, and brand owner Inter IKEA Group said they are investing 1.2 billion euros ($1.39 billion) to lower prices across Europe. The scale of the cuts varies by country. In Germany, more than 1,500 products will have their prices reduced by an average of 20%. In Italy, prices on hundreds of products have been cut by an average of 22%. In the United Kingdom, prices will be lowered on hundreds of home furnishing products and accessories.
To bolster affordability beyond Europe, Ingka Group said it will also invest 70 million euros to help offset inflationary and currency pressures in Asia and North America.
“The investment is not an activity or short-term campaign — it’s about making IKEA more affordable when people need it most, even if it means accepting a lower margin,” said Ingka Group Chief Executive Juvencio Maeztu.
Maeztu added that the company is also investing to make IKEA more accessible by opening many smaller stores as part of an omnichannel approach. Ingka Group is working to open more compact stores in a strategic shift into localized formats that bring furniture closer to customers. After decades of operating large IKEA stores on the outskirts of cities, the chain is expanding into downtown locations in major cities and moving into areas where it has yet to have a presence.