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October 13, 2020

IKEA loses 1.5 billion euros due to corona crisis despite surge in online sales

IKEA loses 1.5 billion euros due to corona crisis despite surge in online sales
  • IKEA announced retail sales of 35.2 billion euros in the financial year to September. That is 1.5 billion less than a year earlier, despite online growth of 60%. Nevertheless, this is a strong performance according to the furniture chain.

Retail sales at IKEA, the world's biggest furniture group, shrank 4% in the year to the end of August as demand recovered quickly from a slump caused by COVID-19, brand owner and franchisor Inter IKEA said.

Retail sales, of products and services at all 445 IKEA stores and online, came in at 39.6 billion euros ($46.7 billion).

E-commerce jumped 45% to account for 15% of total retail sales, and Inter IKEA said online sales remained high even after stores, most of which closed temporarily for an average of four weeks in the early stages of the pandemic, re-opened.

Jon Abrahamsson Ring, chief executive since March, told Reuters sales at stores open for a year or more shrank around 10%, against a 1% rise the year before.

Adjusted for the temporary closures, however, comparable sales were roughly unchanged as the coronavirus crisis boosted people's interest in their homes, he said, adding that he expected sales to return to growth this year.

IKEA is shifting from large out-of-town stores towards online and smaller inner-city stores as it adapts to digitalisation and new shopping habits.

Ingka Group, the main IKEA franchisee, said separately that sales at its 378 stores shrank 4% in the fiscal year to 35.2 billion euros, with online sales soaring 60% to make up 18% of its total turnover.

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