Inter Ikea, which owns the Ikea brand and supplies products to its franchisees, reported turnover down 2% to €25.9 billion and net profit down 7% to €1.4 billion for the year to August. Retail Gazette reported the results on 9 November, as the group put €1.2 billion into price cuts.
Ikea’s global sales fell 2% to €43.8 billion in the year to the end of August, from €44.6 billion a year earlier, the third consecutive annual decline. Weaker trading in China and the Middle East outweighed growth in Europe and Latin America.
Chief executive Jakub Jankowski told the Financial Times that “it was a challenging year for us” and that the coming year may prove difficult too. The group figures are in euros and are not split by country in the coverage, so no UK-only result is available from this report, unlike the UK figures brands publish across the UK franchise directory.
The €1.2 billion price investment
Ikea announced the investment in September to reduce prices on more than 1,000 products across more than 20 European countries, with cuts of up to 25% on selected items. The ranges include the Billy bookcase and Kallax storage units. Jankowski described the approach as a longer-term effort to strengthen affordability, not a short-term promotion.
The company previously cut prices in 2023 after pandemic-related rises in shipping and production costs, and that move initially weighed on turnover and profit, according to Retail Gazette. The 2026 programme covers European markets, and the coverage does not say how it applies to the UK.
Smaller shops in city centres
Alongside the price cuts, Ikea is accelerating a move towards smaller city-centre shops that reach customers who do not own cars or live near its out-of-town warehouses. It opened around 90 smaller stores in the last financial year and is targeting a 50% increase in openings across 2026 and 2027. Jankowski said urban shoppers would also require ranges to be refreshed more often, with more seasonal products. The strategy follows the opening of the Oxford Street flagship in London last year, which Retail Gazette describes as part of Ikea’s push into high street retail.
Good to know
Retail Gazette reports two separate sets of figures. €43.8 billion is Ikea’s global sales across the whole system. €25.9 billion is the turnover of Inter Ikea, the company that owns the brand and supplies products to franchisees. The two are not interchangeable.
Cost pressures and the outlook
Retail Gazette lists rising freight and energy costs among the pressures ahead, alongside cautious household spending on furniture and home improvements. Retail Gazette says Ikea is stepping up efforts to attract cash-strapped consumers, and Jankowski described the market as “not easy”. He said subdued consumer confidence and geopolitical uncertainty could keep weighing on sales and profit in the coming year.
For UK readers, the results are a read on a brand that operates through franchisees and sells products that sit at the centre of the home and DIY market, alongside the construction and renovation franchises in the UK. The report gives no turnover for the UK business and no figure for UK shops, so any UK comparison has to wait for figures published by the operator itself.
