Suryaa Business Desk: Global furniture and home furnishing retailer IKEA has recorded a decline in sales for the third consecutive year. Rising global living costs and inflationary pressures have led consumers to reduce budgets and postpone long-term purchases such as furniture. Consequently, Inter IKEA Group reported total revenue of 43.8 billion euros for the 2026 fiscal year, representing a 0.7 percent decline after currency adjustments.
To attract customers, the company is implementing a price reduction strategy. Chief Executive Officer Jesper Brodin stated that ensuring products remain affordable is critical under current conditions. The company’s annual report noted stagnant sales over the past few years, highlighting the need for further price cuts to restore growth. Inter IKEA and its retailers have allocated approximately 1.2 billion euros to fund a new round of price reductions across Europe.
While these price cuts have increased store footfall and wholesale sales volumes, rising raw material costs and international tariffs have impacted revenue and operating profit margins. The CEO noted that sales in European markets showed a slight recovery during the first eight weeks of the new fiscal year, though it remains too early to determine if this indicates a long-term, stable recovery.
In response to weak demand, the company has closed seven stores in markets such as China and implemented staff reductions to control costs. Simultaneously, it has opened 15 smaller-format stores in Europe to improve accessibility for consumers. Despite geopolitical tensions and weak consumer sentiment, management expressed confidence in regaining growth by providing affordable home furnishing products to the middle class.
