Ikea’s sales fell last year, with weak consumer confidence and geopolitical turmoil set to weigh on revenue and profits in 2027 even as the world’s largest furniture retailer cuts prices to try to resuscitate growth.
The group’s retail sales from its 519 global stores fell 2 per cent to €43.8 billion during the year to the end of August as weakness in China and the Middle East outweighed growth in Europe and Latin America, brand owner Inter Ikea said on Friday.
“It was a challenging year for us ... It is possible that this year will be challenging also. The market is not easy,” Jakub Jankowski, chief executive of Inter Ikea, said.
Ikea’s business has been volatile since the Covid-19 pandemic as challenges with supply chains and a weakening backdrop for consumer spending have hit its flat-pack furniture business.
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The company responded in September by cutting prices on more than 1,000 products in a €1.2 billion investment designed to boost sales, the second time in the past four years that it has tried such a tactic.
After the pandemic increased shipping costs and pushed prices higher, Ikea cut its average selling price in 2023, a move that initially hurt revenue and halved its profitability.
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Jankowski said on Friday that the price cuts of 15-25 per cent on popular products such as Billy bookshelves and Kallax storage units in more than 20 European countries would be part of a push on affordability by the Netherlands-based retailer that would take years.
“Being more affordable is not one year. It is a longer process for us, and then we need to work harder to get the wheels spinning,” he added.
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Ikea’s sprawling retail empire is controlled by two charitable foundations – based in the Netherlands and Liechtenstein – a structure that allows its managers to disregard short-term trends and some of the pressures a listed company would face and invest heavily if needed.
Ikea opened about 90 smaller stores in its last financial year and Jankowski said he hoped the figure for 2026-2027 would be 50 per cent higher as the retailer seeks to become more accessible to customers.
The chief executive of Inter Ikea, which owns the brand and concept of the retail empire, said more and more customers did not have a car or even a driving licence, making its traditional out-of-town warehouses unappealing. The company is instead opening smaller stores in city centres to gain access to more casual customers.
Jankowski said Ikea needed to improve the seasonality and relevance of its products, as some customers in these city-centre shops visited more frequently and wanted the offering to be refreshed.
The other leg of Ikea’s empire – Ingka, the group that generates 90 per cent of its retail sales – will report results this month. Inter Ikea said its own revenues fell 2 per cent to €25.9 billion while its net profit dropped 7 per cent to €1.4 billion last year. – Copyright The Financial Times Limited 2026
