MFI faces bedroom blues as Ikea declares price war

Ailing furniture retailer MFI faces a damaging pillow fight with Swedish giant Ikea, which is mounting a bedroom price war.

Ikea is slashing its prices by more than£20 million. The average price cut is 15 per cent, but it is homing in on the bedroom category by reducing key prices by 25 per cent.

MFI's eponymous chain has been performing poorly in the bedroom, and chief executive John Hancock blamed the category for two-thirds of the retailer's first-half order slump. In the 24 weeks to June 12, orders booked at MFI tumbled 6.5 per cent. UK sales fell 11.4 per cent, with same-store growth down 12.7 per cent.

Ikea will fire its opening shot on August 9 with a monster mail-out of its new 300-page catalogue to more than 10 million homes.

Ikea UK boss Peter Hogsted promised a 'bedroom focus'. He said: 'We are offering deeper (bedroom) ranges and different styles. We have decreased some of the modern lines and are introducing more country styles, which we think will fit British tastes.'

Ikea has upped its mattress quality and added trimmings such as textiles and lighting. Prices include bed frames at£109, wardrobes for£49 and bedside tables for£29.

MFI has already increased the rate of new product in stores - five new bedroom ranges are planned for the autumn - and believes more price-conscious advertising will provide some sales-Viagra.

The retailer has also made Silentnight its sole divan supplier, cutting delivery times to a fortnight.