🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

IKEA store owner eyes more price cuts as some input costs ease

Published 11/28/2022, 09:47 AM
Updated 11/28/2022, 11:51 AM
© Reuters. FILE PHOTO: The company's logo is seen at an IKEA store in Nice, France, May 11, 2022.  REUTERS/Eric Gaillard/File Photo

By Abhirup Roy and Shilpa Jamkhandikar

MUMBAI (Reuters) - Ingka Group, the owner of most IKEA furniture stores, is planning additional price cuts as some input costs ease, its retail manager told Reuters on Monday, a reversal from price hikes introduced last year to counter soaring inflation.

The world's biggest furniture retailer raised prices in its fiscal year to the end of August to pass on soaring raw material costs and supply chain disruptions. But it was able to lower some prices again towards the end of the period as stocks started filling up and supply chains recovered.

"We are optimistic to continue focusing on lowering prices where we can," Tolga Oncu, Ingka's head of retail, said in an interview on Monday. "I am quite optimistic going forward."

The moderation of some input costs, such as metal and sea transport, will allow the company to continue the reductions, Oncu said.

Opportunities for efficiencies in operations will continue to help IKEA deliver profits while lower prices should attract new cost-conscious customers, he added.

Brand owner Inter IKEA, which is in charge of supply, said this month input prices had begun to stabilise, and that promotional campaigns and lower prices on some popular products would be key to attracting cash-strapped shoppers.

High inflation has forced consumers the world over to tighten their belts with aggressive central bank rate hikes adding to fears of a global recession and weaker demand.

"I think our business model really focusing on lowering the prices and making sure we are even more affordable is paying off in times like this," Oncu said.

© Reuters. Tolga Oncu, head of retail at Ingka group which owns most IKEA stores worldwide, poses for a photograph after his interview with Reuters inside an IKEA store in Mumbai, India, November 28, 2022. REUTERS/Abhirup Roy

Oncu was speaking on a visit to India, a market IKEA entered in 2018, and where it currently has three traditional giant out-of-town big-box stores and two smaller inner-city stores. India is one of its fastest-growing markets and it has said it plans to invest in further stores as well as shopping malls.

It plans to open more stores in the Indian cities of Chennai in the south, Pune in the west and near the capital New Delhi.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.