Ikea cuts prices in Europe by €1.2bn to counter cost of living crisis

{"text":[[{"start":10.22,"text":"Ikea is cutting prices by €1.2bn in Europe this year on some of its most popular products such as Billy bookshelves and Kallax storage units, as the flat-pack furniture retailer seeks to counter the cost of living crisis by taking a hit to its profits."}],[{"start":26.04,"text":"The world’s largest furniture retailer said on Tuesday that it would cut costs of about 1,500 products by 15 to 25 per cent in more than 20 European countries as consumer confidence continues to remain depressed."}],[{"start":39.16,"text":"“Ikea likes to reduce the price of the umbrella when it’s raining. And it’s raining for many customers, because the cost of living is increasing. So this is exactly the right thing for Ikea to do,” Juvencio Maeztu, chief executive of the leading Ikea retailer Ingka, told the FT."}],[{"start":55.92,"text":"European consumer confidence remains at its lowest level in three years despite a recent uptick, taking a sharp hit after the Iran war began in February amid concerns about inflation and higher energy prices."}],[{"start":67.4,"text":"Ikea, which is privately owned by twin charitable foundations, did something similar in 2023 to offset large price rises due to rising logistic costs after the Covid-19 pandemic. That led to its first drop in revenues in a decade and a halving in profits."}],[{"start":null,"text":"

"}],[{"start":84.72,"text":"The price reductions vary subtly from country to country but include 27 per cent off a Bestå TV shelf in Germany, 28 per cent off Billy bookshelves in the UK and up to 29 per cent off Kallax storage systems in Italy."}],[{"start":98.36,"text":"Jakub Jankowski, chief executive of Inter Ikea, the owner of the brand and concept, told the FT: “I strongly believe this is not a one-off. We will continue to do it. It’s a long-term commitment.”"}],[{"start":110.24,"text":"He added that Ikea’s integrated supply chain meant it was easier to cut prices in Europe, but that the retailer would use €70mn to reduce them in the Americas and Asia as well."}],[{"start":120.82,"text":"Maeztu refused to comment on exactly how it would affect results, other than to acknowledge it would hurt profitability. Ikea is about to report full-year revenue figures as its financial year runs to the end of August, with the effect of the price cuts set to appear in next year’s figures."}],[{"start":137.96,"text":"“Our entry point is to accept that it will lower results, because it’s a time to side with the many people,” Maeztu added."}],[{"start":145.12,"text":"Ikea has historically cut the prices of its products slowly over the years by tweaking their design and assembly to reduce their size. But after decades of modest inflation in Europe and the US, it has been forced to take more radical action in recent years as it seeks to offer affordable furniture to customers even as the cost of raw materials and logistics has risen sharply."}],[{"start":171.2,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788254686_2049.mp3"}