IKEA may cut prices as inflation eases | Wilnesh News

swedish home and furniture company IKEA has started to cut prices As global inflation slows, many countries have stepped up investment in price cuts.

The company will further expand price cuts in all global markets in 2024, aiming to reverse the price increases that began in 2022. The move comes amid falling transportation and raw material costs.

“We do this in all the markets where we operate,” Tolga Öncü, head of retail at Inkga Group, the largest owner of IKEA stores, told CNBC on Monday.

“For companies like IKEA, now is the time to invest in pricing rather than profitability,” he said, adding that many people now have “thinner wallets.” Öncü said price cuts that began in Europe in September led to an increase in the number of customers and more goods being sold by retailers.

According to statistics, between September and November, Ingka has invested more than 1 billion euros ($1.1 billion) in price reductions in its operating markets. Reuters.

In Canada, the price of its popular Billy bookcases has fallen by 20 percent since the company invested €55 million to lower prices on more than 1,500 products. He said in January.

The Swedish retailer warned of delays and pledged to continue cutting prices just months after major commercial shipping disruptions occurred across the Red Sea.

Billions of dollars worth of goods have been diverted amid security concerns raised by a wave of Houthi attacks since December 2023.

Despite the geopolitical risks in the Red Sea, “we have more and better equipment than ever before, so we will stay true to our commitment and continue to lower prices in all countries where we operate,” Onku told CNBC’s Squawk Box Asia.

“At IKEA, it’s all about serving people,” he said. “The dreams and aspirations of many people to have a better home have not changed due to economic challenges, so I’m pleased that we can contribute to making products more affordable and sustainable for many people.”

Ingka Group also plans to expand its shopping mall portfolio by using IKEA stores as the basis for its shopping malls. The holding company hopes to turn IKEA stores into destinations by integrating shared office spaces, restaurants and more, according to the company. wall street journal.