IKEA continues to grow in a challenging business environment. FY22 has been a challenging year for people everywhere. Inflation was a big part of that, and people can afford less and less.
“This year’s challenges continue to give us perspective into people’s life at home, our business environment and our priorities. Homes now fulfil more functions and solve more problems than ever before. That means people need home furnishings and solutions at an affordable price,” says Inter IKEA Group CEO Jon Abrahamsson Ring.
With that in mind, 231,000 IKEA co-workers supported hundreds of millions of people to create a better life at home. As a result, IKEA retail sales increased 6.5% (3.5% when adjusted for currency impact). Total FY22 IKEA retail sales reached EUR 44.6 billion compared to EUR 41.9 billion in FY21.
This year IKEA store sales grew 13% compared to FY21, when many stores were closed due to the pandemic. Overall, they welcomed 822 million visitors in FY22 compared to 775 million in FY21. Store sales grew mainly in Europe, where FY21 lockdowns were most severe. At the same time, online sales were 10% lower compared to FY21, though they stabilised at a higher level this spring. IKEA online channels hosted 4.3 billion visitors, down from 5 billion last year.
The pandemic limited growth in FY21, and IKEA retail sales benefited as the world re-opened. On the other hand, inflation and supply chain issues impacted FY22 sales, and lead to rising costs and higher prices. That means sales have grown in money, but sales quantities have not kept up. In addition, supply chain shortages made it difficult to keep IKEA shelves full.
“Thanks to co-workers across IKEA having worked tirelessly to improve business environment we now start to see a positive development,” says Jon and adds:
“IKEA prices remained relatively stable for several years. That gave us an advantage when competitors raised prices early in the pandemic. Unfortunately, we can’t ignore surging raw material and transport costs. Long-term, we remain committed to affordability for the many people around the world”.
The continuing war in Ukraine has also affected IKEA customers and business alike. IKEA continues to scale down presence in Russia with full consideration for the many co-workers, partners and suppliers who’ve made the brand successful there for several years. IKEA joins the many international calls for an end to the war.
In contrast to these scale-down activities, IKEA opened retail operations in new markets, including the very first IKEA store and online channel in South America. IKEA Santiago de Chile opened on 10 August, and South American expansion will continue with Colombia and Peru during the coming years. The Philippines also became a new IKEA market, and the first IKEA stores in Estonia, Puerto Rico and Oman opened their doors for the first time. In total, 38 new IKEA sales locations opened around the world in FY22.
As always, IKEA stores launched several new products as well. These include the ÅBÄCKEN water nozzle, which provides an affordable solution to help customers cut down on water usage at home by up to 95% in mist mode. And the iconic BILLY bookcase returned this year in a range of beautiful wood expressions. Now customers can disassemble and reassemble BILLY as needed. The new bookcases also use paper foil instead of veneer and use less plastic compared to previous versions.
BILLY is just one example of an IKEA product that avoids unnecessary material consumption. Other examples include LACK tables and the PLATSA storage system, which use lightweight constructions. Recycled wood will play an even more important role going forward, and IKEA products will continue to include more and more recycled materials such as aluminium, plastics and textiles.
“Big thanks to all IKEA co-workers, franchisees, partners and suppliers for your efforts to make IKEA successful in FY22. We are proud of what we achieved in true togetherness while we perform and transform our IKEA business at the same time,” says Jon.