Furniture giant is going backwards when it comes to sales
Ikea Switzerland is now announcing price reductions – because of Ösi-Import XXL Lutz?
The furniture giant was unable to improve on the record sales result from the previous year. Now the prices for some products are permanently reduced. In addition, Ikea Switzerland is increasingly focusing on the areas of service, new mini branches and business customers.
Ikea achieved a good annual result – although the previous year’s sales were not reached.
No new record. Ikea Switzerland achieved sales of almost 1.2 billion francs in the financial year that ended in August 2022. That is 5 percent less sales than in the previous year. The Swedish furniture giant will no longer achieve the record result of 2021 in this country. The reason for this is “changed consumer behavior with more spending on travel and leisure”. But it is also conceivable that the offensive of the Austrian competitor XXL Lutz in Switzerland will snatch away Ikea customers.
Ikea Switzerland defends with an announcement: In order to be able to continue to offer “the most attractive prices for every budget”, the Swedish furniture giant will reduce the prices of 100 “popular products” in the long term and another 200 short-term price reductions for the 1.89 million registered Ikea family – Make members.
Incidentally, inexpensive furniture is also available in second-hand shops: since autumn 2018, customers have been able to sell used Ikea furniture back to the company. The volume of such transactions has increased by 20 percent in the last year. Which leads to buyback costs and lower sales prices at Ikea.
Services are in demand
The share of online sales, which has grown significantly over the last year, is stable at 23.3 percent. A total of 52.9 million website visits were recorded. So online sales remain important. Despite this, Ikea stores still saw 11.8 million physical visits.
According to Ikea, more and more customers are looking for professional help with furnishing their homes. More than every third sale was supplemented by a service such as planning, assembly and installation or “Click & Collect”.
New store format
Ikea is meeting this need with the new “Plan and order point” store format, which has been available in Chur since September and since Monday (November 7) in Zurich, too, covering 300 square meters. This offers an experience space with furnishing models you can touch, free planning of kitchens and cupboards, and personal advice.
The B2B segment “Ikea for Business” for business customers also grew strongly, with an increase of 33 percent. This growth is related to the ongoing trend towards hybrid working models.
An anniversary year is approaching
No matter how the business develops, there will be celebrations in the current financial year one way or the other. In 2023 Ikea Switzerland celebrates 50 years of presence in Switzerland. Ikea is also celebrating its 80th anniversary worldwide.