IKEA passes on savings after crises lead to more efficient UK business
Swedish retail giant, IKEA, has emerged from Brexit and COVID a leaner and more profitable business in the UK, its latest annual figures show.
The UK business operates key depots in Warrington and Ashton-under-Lyne, as well as three smaller Plan & Order Point stores in Aintree, Stockport and Preston, as part of a nationwide roll-out of the initiative.
A national roll-out of more than 70 additional mobile pick-up points in partnership with Tesco is also under way, and set to be complete by this autumn.
Annual turnover for the UK business grew by 11.9% to £2.46bn, while pre-tax profits for the most recent period, ending September 2023, were £128m, up from £88.07m the previous year.
Peter Jelkeby, CEO and Chief Sustainability Officer, IKEA UK & Ireland, said: “In our 80th year, we can be proud of our performance. FY23 was a year in which we improved our customer experience, grew our market share and continued making meaningful investments in our business and people.”
Peter Jelkeby
He added: “Having overcome challenges posed by Brexit and COVID, we have since focused on a creating a more efficient organisation and improving our profitability, which gives us the financial strength to continue investing for generations to come.
“Despite a difficult economic climate, our focus remains on new locations, new store formats, and in new services.”
IKEA has also been investing in cost transformation projects focused largely on improved energy and waste management.
And as the cost-of-living crisis continued to impact customers, IKEA saw a clear pattern emerge. In response to economic strain, customers sought durable solutions that enhanced the dual role of the home as a sanctuary and a space for work and leisure activities.
The importance of storage across the home was reflected in sales of IKEA’s highly adaptable PAX and KOMPLEMENT wardrobe systems, which increased 49% and 39%, respectively, with the BESTÅ storage system growing by 25%.
During the reporting period IKEA registered one million new visits to its UK stores (+2.2% vs FY22); 19% growth in online sales (38.5% share of total sales in FY23); 24% growth in remote sales; and a 48% increase in click & collect purchases.
The 2023 period also marked important steps to create a positive societal impact, through new initiatives ranging from IKEA’s long term partnership with Shelter, to a £4.5m investment in EV charging infrastructure.
During the current financial year the business is investing more than £35m in the financial wellbeing of co-workers and passing £100m in savings on to customers through new lower prices, as purchasing goods costs improve.
Mr Jelkeby said: “As we look to the future, we are proud to have kickstarted 2024 by lowering a significant volume of prices, with more to come, underscoring our commitment to being on the side of those with the lowest means.”
