Despite a decrease in sales, Inter Ikea reports a profit increase for 2024.
- Operating profit climbed by 4%, reaching £1.9bn as of 31 August 2024.
- Sales fell by 9% to £21.9bn amid significant price cuts across products.
- Average price reduction of 15% set by Inter Ikea, with a 10% drop observed at retailers.
- Further price cuts are anticipated, driven by the aim to enhance affordability.
Inter Ikea, the parent entity of the iconic furniture brand, announced a noteworthy rise in profit for the fiscal year 2024, despite experiencing a decline in overall sales. Operating profit increased by 4%, moving from £1.8bn to £1.9bn, as revealed in reports up to the end of August 2024.
The company’s sales, however, experienced a contraction, diminishing by 9% to a total of £21.9bn. This downturn comes as a result of deliberate strategic choices to lower product prices significantly.
In an effort to make its offerings more affordable, Inter Ikea implemented an average price reduction of 15% across its products over the year. This strategy enabled Ikea retailers to further decrease their prices by an average of 10%, fostering a more competitive market presence.
Henrik Elm, the Chief Financial Officer of Inter Ikea, commented on this approach, highlighting the company’s end goal of enhancing affordability, following previous price hikes necessitated by the increased costs of raw materials. While more price cuts are on the horizon, Elm did not specify exact figures.
A proactive pricing strategy is at the forefront of Inter Ikea’s operations, aimed at sustaining profitability while expanding accessibility for consumers worldwide.
Inter Ikea’s strategic pricing adjustments position the brand to maintain profitability while enhancing consumer affordability.
