IKEA to spend 1.2 billion euros to make products cheaper in Europe
IKEA is launching massive price cuts in Europe and investing €1.2 billion in it. From September 1, hundreds of popular products will become cheaper, with average reductions of 15-25% depending on country and category.
The new pricing program was announced by Ingka Group - the largest franchisor of IKEA stores, other franchisees, and Inter IKEA Group. The company explains the decision as a desire to make home furnishings more affordable amid high cost of living in European countries.
According to Ingka Group CEO Juvencio Maeztu, this is not a short-term promotional campaign. IKEA is willing to accept lower margins in order to reduce prices for customers.
How much will prices drop
The reduction covers both everyday items and the most famous IKEA series, including KALLAX storage systems, HEMNES daybeds, and POÄNG armchairs. The specific list and discount size will vary by country.
In Germany, the company is reducing prices on more than 1,500 products by an average of 20%. For example, the BESTÅ TV bench gets 27% cheaper, and select IKEA 365+ kitchen items up to 24%.
In the UK, prices are cut on hundreds of furniture and accessory items. The BILLY bookcase will be 28% cheaper, and the TROFAST storage system 24%. In Italy, hundreds of items become on average 22% cheaper: KALLAX prices fall up to 29%, and BESTÅ frames on average 26%.
In Belgium, over a thousand products become cheaper
The scale of the program can be seen in individual markets. IKEA Belgium is allocating €20 million to lower prices on more than a thousand products. From September 1, about 850 items have become cheaper, and over a hundred more are expected to drop in the coming months.
Most of these changes will be permanent. Additionally, by the end of December, 58 products in Belgian stores will have separate temporary discounts.
For instance, the BILLY bookcase in Belgium drops from €44.49 to €39.99, and the ANTILOP children's chair from €19.99 to €14.99. Some items see much bigger reductions: BESTÅ storage systems can cost 53% less.
IKEA willing to sacrifice part of profitability
The company openly acknowledges that the new pricing policy means lower margins. IKEA views this as a long-term investment in affordability of its products, not a seasonal promotion.
At the same time, the group continues to expand its network of smaller format stores and develop sales through various channels, trying to make shopping more accessible not only in price but also geographically.
The bulk of investments this time is directed to Europe. Separately, Ingka Group plans to allocate an additional €70 million to mitigate the impact of inflation and currency fluctuations on prices in Asia and North America.
Based on materials: IKEA, RetailDetail
