Swedish furniture group Ikea has revealed that sales growth has slowed over the past year and that it will curb its expansion plans as the global housing market stalls.

Group sales in the year to August climbed 7 per cent to !21.2 billion (£16.8 billion) – the highest sales figures since the retailer was founded in 1943 – but the increase compares with a 14 per cent rise the previous year.

However, industry observers said these are still market-leading results.

MHE Retail chairman Edward Whitefield said: “These results are exceptionally good. 7 per cent tells me they are adding new stores and just about holding on to their like-for-likes, which compares well with its competitors whose like-for-likes will be at least 10 per cent down at the moment.”

Ikea managing director Anders Dahlvig blamed turbulent currency exchange rates and the global downturn for the slowing growth. “We have probably underestimated the intensity of the slowdown,” he told a Swedish newspaper. “This time it’s very much about a crisis in the housing sector, which of course hits us very hard.”

Ikea will reduce its store openings from between 20 and 25 a year to between 10 and 15 from 2010 onwards. It opened 22 new stores last year and will open 20 more this year. Dahlvig said the US, German and UK markets were suffering the most.

Whitefield said: “Ikea is opening its stores in line with cash flow volumes available. Profits will be down, so there is less money to invest. It is a very good indicator of sound financial management.”

He added: “The US DIY sector is suffering serious like-for-like declines and consumer confidence in Germany is very fragile right now. Any [retailers] to do with homes are in a negative phase, particularly in those countries suffering the highest sub-prime fallout.”

The retailer never reveals its profits for “competition reasons”, according to Dahlvig, who would not rule out further job cuts.