Ikea, the Swedish furniture giant, is set to continue its trend of reducing prices in the U.S. as inflationary pressures begin to alleviate.
Recently, Ikea announced a price reduction on hundreds of products and pledged to “keep lowering prices in the U.S. in the upcoming months,” as stated in a release provided to FOX Business. These products have been featured in the “new lower price” section on Ikea’s website.
Expanding its price-cutting strategy globally, Ikea plans to continue this trend throughout 2024, leveraging the easing costs of transportation and raw materials.
Tolga Öncü, head of retail at Ingka Group, Ikea’s largest store owner, revealed in January that the company intends to intensify its investment in price reductions over the next few months. Their aim is to revert the company’s prices to their pre-pandemic levels adjusted for inflation by the end of 2025.
Öncü highlighted the positive economic trends and decreasing raw material prices in the supply chain, which are expected to counter the price increases observed since 2022.
He emphasized efforts to reduce operational costs and enhance efficiency through technology investment, employee training, store repurposing, and the introduction of more affordable services.
In Germany, approximately 2,000 products witnessed a price reduction averaging 20% in January, Öncü disclosed. Similarly, in Sweden, prices were lowered for 2,500 products, while over 1,500 products received price cuts in Canada.
During an interview with CNBC, Öncü noted that the price reductions implemented in Europe in September led to increased customer traffic and higher sales volume.
