Ikea has reported a decline in full-year sales but group boss Jesper Brodin hailed the home and DIY retailer’s resilience and adaptability during the pandemic.

Ikea reported a 4% decline in sale to €35.2bn (£32bn) in the year to the end of August, driven by enforced store closures across 75% of the group’s global store estate at various times due to coronavirus regulations.

The homeware retailer’s online sales jumped 60% during the year and accounted for 18% of total sales, up from 11% the previous year. Ikea’s online sales rose more than 30% in 70% of the countries it operates in, with the most significant online growth coming from Portugal, Denmark and Australia.

Jesper Brodin Ikea

Source: Ikea

Jesper Brodin: ‘I believe there will be some revamp for customers in the value of physical space’

Chief digital officer Barbara Martin Coppola said the retailer coped with online demand at the same level as a typical Black Friday for many consecutive days during the height of lockdown and the brand has upped its production levels of key lines to cope with demand.

Ikea said it did make a full-year profit across the group this year, though it did not disclose how much, and as a result, has reimbursed the money it received through the furlough scheme as the business “recovered faster than expected”.

Brodin said the retailer is expecting coronavirus related restrictions to continue well into next year and anticipates the retailer’s performance will continue to be resilient as shoppers transform their homes to accommodate at home offices and gyms.

The retailer opened 26 new Ikea locations across its global store estate during the year, focused on city-centre outlets in Shanghai, Seoul, Moscow and Tokyo.

The retailer and its franchisees plan to open a further 50 stores worldwide, 30 of which will open next year including the brand’s first UK city-centre store in London.

Brodin is adamant the retailer will continue investing in store openings despite coronavirus-related restrictions and subsequent nervousness from shoppers about visiting physical stores.

“80% of our customer start their shopping online, but very few who are channel-specific,” he said.

“On top of that, in retail, I believe there will be some revamp for customers in the value of physical space as a place to meet people, touch and feel products, gratification, food and inspiration, which means we have to be even better in that environment.”

As evidence of this appetite, Brodin points to the fact that Ikea’s store visitor numbers fell only 15.8% during the year to 706 million despite weeks of closures across its global estate as shoppers used time at home as a chance to spruce up their living spaces.

He added that Ikea’s big-box stores have doubled as mini-fulfilment centres during the crisis and it is part of the group’s long-term “strategy to use our stores as fulfilment centres for our last-mile deliveries.”

Retail operations manager Tolga Öncü said Ikea’s kitchen range has sold strongly through lockdown – a trend he expects to continue across Black Friday and Christmas, both of which he expects to be up in terms of year-on-year sales.

“During Christmas, we’ll increase the amount of time we’ll spend at home and cook. For everything relating to cooking, I think we’ll see a huge increase in demand. I’m pretty sure many of the recipes from our grandparents that we follow are not aimed at a small party during Christmas, so food storage will sell well too,” he said.