IKEA sees global consumer rebound as sales growth almost doubles

Reuters STOCKHOLM | Updated on November 29, 2017 Published on September 09, 2014

IKEA Group, the world's biggest furniture retailer, is seeing evidence that consumer spending is picking up, even in recession-hit southern Europe, as the pace of growth in annual sales nearly doubled compared with the previous year.

The Swedish company, seen as a reliable gauge of global consumption because it has more than 300 stores in 26 countries, said on Tuesday some of the strongest growth was in China, while North America continued to perform well.

Europe, where IKEA derives almost 70 per cent of its sales, was still burdened by a challenging economic situation, but it is improving slightly.

"We continue to see positive signs in consumer spending and it's a great joy to report growth in almost all our markets, not least in the challenging markets in southern Europe," IKEA Chief Executive Peter Agnefjall said in a statement.

The Swedish flat-pack furniture giant's biggest markets are Germany, the United States and France.

IKEA's sales rose 5.9 per cent to 28.7 billion euros ($37.0 billion) in the 12-month period ended Aug. 31, an acceleration from the 3.2 percent growth it reported for the previous year. Sales in comparable stores during the year grew 3.6 percent.

IKEA has a target to double sales to around 50 billion euros by 2020 through combined growth in sales at existing stores and by launching in new markets, but did not comment on its progress towards that goal.

Growth in e-commerce

Founded in a shed in 1943 by Ingvar Kamprad to sell pens, wallets, watches and jewellery, and whose stores now sell everything from candles to fitted kitchens, said e-commerce showed growth, while the number of store visitors also increased, without giving figures.

IKEA was initially slow to embrace online retail but is now investing more as rivals compete for a chunk of its business.

Online furniture retailer Home24, a German-based start-up, has set its sights on challenging IKEA's dominance. It is expanding to Belgium - its sixth market - and plans to launch in other countries in the next year.

IKEA is also facing competition in home furnishings from fashion chains such as Zara, Next and Hennes & Mauritz.

In response to a shift in shopping habits to smaller local stores and the Internet, IKEA opened its first city centre store earlier this year in Germany.

Published on September 09, 2014
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