Furniture company IKEA is slashing prices on a quarter of its products in Belgium, aiming to reverse the downward trend in sales volumes worldwide.
Some of the Swedish chain's products have already become cheaper over the last few days, and over the next few weeks, another 2,600 products will follow – more than a quarter of its 10,000-strong product range.
The price of the Strandmon armchair, for example, will fall by 28%, the Brimnes wardrobe by 33% and the Regolit lampshade by 46%, André Schmidtgall, Managing Director of IKEA Belgium, told L'Echo. "Although the price cuts are not all 30%, the products will still be significantly cheaper."
This is all part of a strategy to reverse disappointing sales volumes worldwide, he said. However, the prices of 62 products – less than 1% of IKEA's total offering – will instead go up.
'Supporting customers as much as possible'
Additionally, IKEA is also making its online shop cheaper: customers picking up products ordered online in shops currently pay a €4.99 handling fee, but this fee will be reduced to €2.99 for IKEA Family cardholders. This service is expanding rapidly: last year, sales at collection points almost doubled.
In Belgium, the Swedish retailer's new price cut – in force until August – is expected to result in a loss of revenue of €48 million. The previous price cut on 750 products will cost the company €29 million over the same period.
Whether or not the reduced prices will be maintained after August will depend on the economic situation, although the company said it intends to maintain them after the summer.
The company will soon be reducing its prices in other countries too, "although each country will apply the reductions in its own way," said Schmidtgall. "We have chosen to lower the prices of our cheapest products to support consumers as much as possible."
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Last year, IKEA's volumes came under pressure worldwide. Its revenues rose by 6.6% to €47.6 billion in the 2023 financial year to date, but this was due to price increases applied in response to rising inflation. Volumes, on the other hand, fell.
By lowering its prices, IKEA wants to encourage its customers to buy more.
Over the same period, IKEA Belgium's revenues also rose by 16% to €1.2 billion. Unlike the IKEA group's overall volumes, Belgium's volumes increased but mainly "due to higher prices," said Schmidtgall.
"In recent years, we have had to increase our prices because of rising costs. We regret this, because lowering prices is in our DNA," he said, adding that the current economic situation makes this possible. "Energy prices and transport costs have fallen again and we have made our organisation more efficient."
