Ikea cuts prices on 1,500 products in Europe

Furniture giant Ikea said Tuesday it was cutting prices by up to 28 percent on around 1,500 products in Europe as of September 1 in order to woo customers hit by the rising cost of living.

Ikea has reduced its prices several times in recent years, even as it caused a hit to the company's revenue and profit in its most recent earnings report.

"There's a long-term commitment about lowering the prices to our customers," Jakub Jankowski, the managing director of Inter Ikea Group, the multinational's main holding company, told AFP in an interview.

"Suppliers will not go through any cost pressure because of this," he insisted, noting there was "a high chance that if we are selling more, the suppliers will produce more."

The price reductions will cost Inter Ikea Group, Ingka Group, which includes almost all Ikea franchises, and the retailer's other European franchises some 1.2 billion euros ($1.4 billion), he said.

The change will apply to around 900 products in each market, Ingka Group said.

To further improve price accessibility beyond Europe, Ingka Group will also invest 70 million euros to offset inflationary and currency pressures in Asia and North America.

Across Europe, prices of popular and iconic Ikea products -- including some Billy shelving models, Kallax storage solutions, and kitchen equipment -- will be reduced by 15 to 28 percent.

The selection of products and the scale of the reductions will vary slightly from one market to another, Juvencio Maeztu, chief executive of Ingka Group, told AFP.

After announcing a rare price increase in the aftermath of the Covid pandemic, the Swedish flatpack giant has invested between two and three billion euros in lowering its prices by 10 percent since 2023.