Good News For Consumers as Ikea Announces Price Cuts Amid Inflation; Here's What That Means
It's not every day that big brands slash their prices amidst rising costs in the nation. It is a big deal! Recently, IKEA announced its reduced prices by introducing additions in its offer sections for customers to easily navigate through the products. IKEA originated as a popular Swedish furniture and home goods company that gained global appreciation for its stylish, affordable, and aesthetic products. The company was founded by Ingvar Kamprad in 1943 and has now grown to be the world's largest furniture retailer with stores in over 50 countries. Some of their products that are loved by customers globally include store and organize furniture, storage solutions, living room seating, bedroom furniture, office storage, kitchen accessories, children’s storage, and the list has more enticing products.
One of the most lovable features of IKEA products is their flat-pack furniture i.e. the company packs the furniture items into boxes. It is beneficial for customers as they can easily carry it without any hassle and for IKEA, their shipping cost is saved. Hence, the lower product prices. The stores have set up ideation of different rooms where they give you ideas for decoration and storage. With the increasing demand for the products, the company shifted into the online space and is flourishing with its revenue going up.
With the announcement of the reduced product price, Tolga Öncü, head of retail at Inkga Group shared with CNBC, “We are doing it in all the markets where we operate. This is the moment for companies like IKEA to invest in pricing rather than profitability." They are further planning to keep their prices lowered this 2024 to make up for the price increase their customer experienced in 2022. Tolga further says that a lot of consumers now have “thinner wallets” or financial constraints, and it would be best to at least offer them products at affordable prices. Additionally, IKEA is more invested in this as the shipping and procurement of materials is costing less and it will help them in enhancing their investments. As per Reuters, between September and November 2024, Ingka has been seen investing more than $1.1 billion in price cuts across its operational markets.
Ingka mentioned in January 2024 that in Canada, the price of its popular Billy bookcase has fallen by 20% since the company invested 55 million euros to trim prices for over 1,500 products. The company faced various disruptions in the Red Sea amidst the rising wave of Houthi attacks in 2023. Questioned about the changes Öncü told CNBC, “Despite the challenges faced in the Red Sea, we are more and better equipped than we have ever been, so we will stick to our promise to continue decreasing the prices in all the countries where we operate. In IKEA, it’s all about serving the many. The dreams and desires of many people to have a better home haven’t changed due to economic touch challenges, so I’m happy that we can contribute to providing more affordable and more sustainable products to many people." Inkga Group is working relentlessly to expand the IKEA stores and make them look more appealing to customers by integrating various working spaces, eateries, and other elements.