Ikea sees sales decrease in UK, citing weak economy

However, Ikea said that a £117m investment in cutting prices,  four new stores opening in the final quarter and an expansion of its click-and-collect service had led to sales volumes increasing by 4% across the year. 

The furniture retailer made a significant shift in its bricks-and-mortar strategy this year, opening two city-centre stores, one in the former Topshop location on London’s Oxford Street and another in Brighton’s Churchill Square shopping centre. 

It also opened a further two new format small stores in retail parks in Harlow and Norwich. A similarly sized store opened in Chester last week. 

This increased store footprint helped drive sales growth of 3.3% in the final quarter, a trend which Ikea said had continued into September. 

“In a challenging environment marked by economic and trade uncertainties, rising cost-of-living pressures and weakened consumer confidence, I am proud that we continued our programme of strategic investments in the UK to build a more affordable, accessible and sustainable IKEA,” said Ikea UK chief executive and chief sales officer Peter Jelkeby. 

Online sales were up by 2% and now represent 43% of Ikea’s UK revenue. The company opened two ‘Plan and Order’ points in Hull and York during the year, where consumers could collect online orders as well as planning and ordering kitchens and storage solutions.

Ahead of the UK’s Budget at the end of November, Jelkeby called on UK chancellor Rachel Reeves to lower financial pressures on the retail sector. 

“While our strategic investments in affordability and accessibility are delivering strong results, we’re trading in a difficult economic environment. Simple, targeted support from the government, like easing the burden of business rates would make a tangible difference, encouraging retailers to continue investing, saving existing jobs and creating new ones, and serving communities across the country,” he said.