Ikea’s profit has fallen despite the increase in sales

BTJ Desk Report
Ikea's profit has fallen despite the increase in sales

British retailer Ikea’s sales rose despite high global commodity prices and inflationary conditions. The company’s sales have increased by 12 percent compared to the same period of the previous year.

Ikea, the world’s largest furniture retailer, says that since August 31st this year, customers have started shopping directly in stores. At this time, online shopping decreases. Last year, the amount of online shopping among the general public increased during the pandemic. At that time, 45 percent of annual sales were online. This time it has reduced to 35 percent.

Total annual sales have risen to £220m this year as shoppers return to stores. As a result, sales are approaching pre-pandemic levels for the first time. Moreover, operating profit also fell to £50 million, from £6.10 million last year.

“Our supply chain has been restored,” said Peter Jelkeby, Ikea’s country retail manager in the UK. Necessary improvements in service have also been made. But since the inflationary situation has not yet passed and the prices of goods have not been increased at the consumer level, we have a lot to watch out for. For example, we are working on how to deliver cheap products to customers in a competitive market.

He said, in the current global situation, buyers are always looking for ways to reduce costs and save fuel. Consumers are buying heat-resistant curtains, water-saving faucets and electricity-saving tube-lights.

This official said that Ikea is trying its best to keep the price of products affordable at the consumer level and to make the business sustainable through sound management. Electric vehicles are now being used to deliver products to customers’ homes. Ikea wants to reduce carbon emissions to zero by 2025.

Ikea is moving forward with several plans for the newyear. Meanwhile, their furniture pay-back scheme has gained popularity. In addition, three planning and order points have been opened in Aintree, Preston and Stockport to reach more customers. Basically they are opened keeping Christmas and New Year shopping in mind. Plans are also underway to open IKEA stores in new locations. In addition, two new distribution centers are opening in Dart-ford and Kent to further accelerate the online business.


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