Following Record Year, Ikea To Cut Prices
Following the close of its fiscal year in which sales increased more than 6%, officials with Ikea U.S. said the home furnishings retailer will lower prices on items across the store while giving many employees a bonus payout.
According to the company, Ikea U.S. had a record year in fiscal 2023 with more than $6.3 billion in total sales of goods and services, a 6.6% increase year-over-year. E-commerce grew by 3.3% and online visits increased by 6.3% compared to 2022.
"We are proud to share the success of another strong sales year with our co-workers and customers. When times are tough, we view it as our responsibility to provide quality and affordable home furnishing solutions and services that make everyday life at home a little easier," said Javier Quiñones, CEO & chief sustainability officer, Ikea U.S. "Lowering prices is not just a promotion, it is our promise to our customers. Our priority is to remain as affordable as possible and continue reducing prices whenever we can to ensure that our products are accessible to all and that dream homes are within reach for the many."
In November, Ikea U.S. re-introduced New Lower Price, which reduced prices on hundreds of products across the store and online. Some well known products, such as the BILLY bookcase, were marked down by 20% or more. Additionally, throughout the month of December, the retailer will offer even more discounted items as part of a "24 Days of Deals" promotion and its annual Winter Sale.
These latest moves follow announcements from earlier in 2023 in which Ikea U.S. said it would invest $2.2 billion to grow its presence in the U.S. Since then, Ikea has opened new locations in San Francisco; Arlington, Va.; and Southlake, Tex.; and more than 20 pick-up points across various locations. Additionally, new store formats are coming to stores in Fairfax, Va; Gaithersburg, Md.; and Katy, Tex.
Employees will also be sharing in the spoils as the retailer will be dispersing a total of $54.5 million to co-workers across two-thirds of Ikea U.S. units as part of "One Ikea Bonus," a performance-based payout.
"Our co-workers are the heart of Ikea and our success in the U.S. is a reflection of their commitment to our values and vision," said Neena Potenza, chief human resources officer, Ikea U.S. "By investing in our people, we are building an Ikea for the future. It is important that co-workers at all levels can be recognized and rewarded. Not only is it the right thing to do, but it is good for our business."