LONDON – Swedish furniture retailer IKEA reported a third straight year of declining sales on Nov 6 as it grapples with Iran war-driven cost increases and weak demand from budget-conscious consumers despite a move to slash prices.
IKEA sales across 64 countries were €43.8 billion (S$63 billion) in the financial year ending Aug 31, down 2% compared to 2025, while the BILLY bookcase maker added 30 stores to its global network as it opens more city-centre locations.
“Sales have been stagnant for several years, and if we want to make affordable home furnishing products available to even more people, we need to return back to growth,” said Jakub Jankowski, CEO of Inter IKEA, which owns the IKEA brand and franchises it to retailers around the world.
Jankowski, in the top job since the start of 2026, said in an interview that his aim is to sell more products and become more affordable for families struggling with rising living costs.
Weaker consumer demand drove “smaller purchasing volumes and less efficient use of production capacity at our suppliers and in our own manufacturing operations,” the company said.
Inter IKEA, which sources furniture and supplies it to stores, is also contending with higher freight costs as the war in the Gulf drives up energy prices.
Net profit was €1.4 billion, down from €1.5 billion in 2025.
IKEA is known for giant blue big-box stores in suburban locations but has shifted to smaller, city-centre stores where shoppers can pop in and buy products without needing to drive.
“As less and less people have a driving license or have a car, we need to be closer,” Jankowski said.
IKEA opened 15 small stores in Europe in its 2026 financial year, Jankowski said, but it closed 7 stores in China where consumer demand has been weak.
Inter IKEA also cut 850 jobs in May as it tries to bring costs down. REUTERS
