Ikea has a plan to attract more shoppers to its furniture and meatballs

Ingka Group, the parent company of Ikea, reported a 5% drop in the retailer’s sales to 39.6 billion euros for the 12 months ending August 31, 2024 – the first decline since the pandemic.

While that might initially sound alarming, the Swedish home furnishings giant insists it’s exactly what it hoped to achieve.

Ikea said it attracted more shoppers to its stores than the previous year, with visits to in-person and online stores up 3% and 28% respectively. During the same period, it also opened 43 new stores.

This year, Ikea has grown its market share back to where it was before the pandemic. As economic pressures ease on the back of lower inflation and lower interest rates, customers will turn to Ikea stores even more, said Tolga Öncü, Chief Retail Officer (COO) of the Ingka Group. wealth.

“People are starting to sell more, buy more, and when the economy turns around, we think Ikea will be in a much stronger position than we were before,” he said.

Ikea previously said wealth that one of the main reasons it has been able to prioritize customer needs over immediate financial gain is that it is privately held. This has allowed it to make costly decisions that few others have made as quickly, including raising wages and subsidizing childcare to address high turnover in some of its markets.

Ikea’s plan for 2025

As Ikea opens a new year after winning over cashless customers, it is focusing on increasing the number of customers who choose the company for anything related to home furnishings.

It recently launched its second-hand marketplace in Madrid and Oslo and plans to launch it in more markets in the coming months. Öncü said there has been “high demand” for an eBay-style platform from other markets since it launched its pilot, which will end in December.

“The big advantage, of course, is that by having it on our own platform, we can also support customers … and make it much easier for consumers to exchange their furniture and Ikea products with each other,” he said he.

Another measure points to Ikea’s ability to attract people — sales of its much-loved meatballs and patties are up 25 percent to 1.5 billion in fiscal 2024.

Ikea offers discounts to its members on certain days of the week, which have also been “very, very successful” in increasing traffic to its stores.

“We operate one of the largest restaurant chains in the world, even though we are actually a home furniture retailer,” Öncü said.

Ikea recently launched a new store in central Paris and has a megastore in the works on London’s Oxford Street. These locations, parked in the middle of bustling downtowns, will help satisfy crowds who care about finding an Ikea nearby rather than traveling to the suburbs to shop.

Ikea plans to release full financial results at the end of November.