Ikea cuts prices in bid to woo cash-strapped customers

Ikea, the Swedish furniture giant, is lowering prices on a selection of popular items across Europe to attract customers struggling with the rising cost of living, according to a report. The cuts include popular products like the Billy bookcase and Kallax storage units, with reductions of up to 28% on certain items. The company is spending €1.2bn (£1bn) on these price reductions, which it claims could be achieved through savings throughout the supply chain, including packaging costs.

Ingka, the franchisee managing most of Ikea's European stores, stated that these price cuts are not a short-term campaign but a way to make IKEA more affordable for customers when they need it the most. The company's CEO, Juvencio Maeztu, emphasized that even if it means accepting a lower margin, Ikea aims to provide better storage and organized solutions for many people.

Despite previous price cuts causing a hit to the company's revenue, Ikea continues to reduce prices to tackle the increasing cost of living. The company has also opened smaller stores in central areas like London's Oxford Street and Churchill Square in Brighton to attract new customers. Additionally, Ikea launched a second-hand online marketplace in 2024 to compete with sites like eBay and Facebook Marketplace.

However, consumer confidence in Europe remains at its lowest level in almost three years, according to EU figures, due to worries about inflation and the cost of living. Despite the challenges, British consumers are showing a more optimistic view of the economy and their finances following a truce in the Middle East. Nonetheless, analysts warn that inflation and the rising cost of living could negatively impact consumer confidence in the coming months.