Ikea Cuts Prices Cuts as Inflation Eases

Swedish home and furniture giant Ikea has been reducing prices across various countries as global inflation shows signs of easing, while also increasing investments in price reductions.

In 2024, the company is extending its efforts to lower prices across all its global markets, aiming to counteract previous price increases introduced in 2022. This decision aligns with the decline in transportation and raw material costs.

“We are doing it in all the markets where we operate,” Tolga Öncü, head of retail, Inkga Group, the largest owner of Ikea stores. “This is the moment for companies like Ikea to invest in pricing rather than profitability.” The company is executing price reductions in all markets it operates in, emphasizing the importance of investing in pricing over profitability during this period of economic strain for consumers.

The price cuts, which began in Europe in September, have led to increased traffic and sales for the retailer, Öncü noted. Between September and November, Ingka Group invested over €1 billion (US$1.1 billion) in price reductions across its operating markets, as reported by CNBC.

In January, Ingka revealed that in Canada, the price of its popular Billy bookcase dropped by 20% following a €55 million investment to lower prices for over 1,500 products.

Despite facing challenges from geopolitical risks in the Red Sea, including shipping disruptions due to safety concerns related to Houthi attacks since December 2023, Öncü affirmed the commitment to continued price reductions.

"At Ikea, it is all about serving the many," Öncü stated. "The dreams and desires of many people to have a better home have not changed due to economic touch challenges, so I am happy that we can contribute to providing more affordable and more sustainable products to many people."

In Mexico, Ikea recently announced the opening of a new outlet in Guadalajara as part of its strategy to expand its footprint in the country and streamline logistics for broader coverage across the country. The objective is to open the store within the current year and extend nationwide accessibility via e-commerce by the summer of 2025.