Over the last year, IKEA has been on a mission to lower its prices. Customers in stores across the U.S. have experienced up to a 20% decrease in the price of furniture.
Further price cuts could be on the horizon in 2024, as the Swedish retailer recently announced a reduction in the cost of transportation and raw materials.
Customers Begin to Find Even Cheaper Deals at IKEA
IKEA has long been a cost-efficient way for many people in the Western world to furnish a new home, office, or place of business. However, in 2022, they were forced to hike prices due to global inflation (per CNBC).
Last year, IKEA announced plans to drop prices as global inflation began to ease. The retailer further expanded its price cuts in the new year.
New ‘Lower Price’ Webpage
According to Fox Business, IKEA plans “to continue lowering prices in the U.S. in the coming months.”
The Swedish retailer now has a webpage dedicated to its “new lower price” items, including tables, shelving units, bed frames, wardrobes, and rugs, all at discounted prices.
IKEA Works to Find a Way to Offer Cheaper Prices
IKEA appears committed to ensuring customers get the best deals in 2024.
On the new page, the Swedish retailer writes the deals are part of its promise to find “a way to offer your favorite product for less.”
Inflation Begins to Level Out
Fox Business reported a portion of the price reductions can be attributed to an easing of the global inflation.
However, Inkga Group, which owns the vast majority of IKEA stores, announced furniture prices will be reduced in several countries as the transportation costs of raw materials have dropped.
The Price of Raw Materials Continues to Drop
Tolga Oncu, the head of retail for Inkga Group, announced they have also observed a drop in the price of raw materials.
According to Oncu, the company’s analysts have “seen continued positive economic developments and decreasing prices of raw materials in the supply chain” (via Fox Business).
IKEA Delivers on Its Promise
In January, Oncu announced that IKEA was trying to bring prices back down to those experienced right before the COVID-19 pandemic.
The company has utilized technology to become more efficient, which has ultimately led to lower prices, according to The Sun.
Swedish Retailer Aims for Efficiency
Oncu suggests that IKEA’s investments in technology and training have significantly contributed to the company’s ability to lower prices.
“We have been focused a lot on reducing operational costs and improving efficiency — by investing in technology and training for our coworkers, repurposing our stores, and introducing more affordable services,” Oncu said.
IKEA Prices Slashed Across Western World
Speaking with CNBC in March, Oncu revealed the reduced prices at European stores have increased customer traffic and the amount of merchandise sold.
Stores in Germany have seen over 2,000 products reduced by around 20% on average. In Sweden, 2,500 products have experienced a price reduction.
Swedish Retailer Remain Focused on Pricing
According to Oncu, the price cuts are part of the company’s effort to focus on providing customers with the best prices.
“This is the moment for companies like IKEA to invest in pricing rather than profitability,” he told CNBC.
IKEA Aims to Serve the Many
“In IKEA, it’s all about serving the many,” said Oncu.
“The dreams and desires of many people to have a better home hasn’t changed due to economical touch challenges, so I’m happy that we can contribute to provide more affordable and more sustainable products to the many people.”
IKEA Promises to Continue Dropping Prices
Even with transportation disturbances, such as the recent attacks in the Red Sea, IKEA remains committed to further decreasing prices.
“We are more and better equipped than we have ever been, so we will stick to our promise to continue decreasing the prices in all the countries where we operate,” said Oncu, per CNBC’s Squawk Box Asia.
