# IKEA reports record sales as price hikes offset weakening consumer confidence
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: IKEA Reports Record Annual Sales Despite Supply Shortages
Meta Description: Discover how IKEA achieved record high annual sales despite supply chain shortages, price hikes, and exiting the Russian market. Read more here.
URL: https://financedigest.com/ikea-reports-record-sales-as-price-hikes-offset-weakening-consumer-confidencehtml

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By Anna Ringstrom

STOCKHOLM (Reuters) -Budget furniture giant IKEA reported record high annual sales on Thursday as price hikes and easing effects from the pandemic made up for supply shortages, weakening consumer confidence and its exit from Russia.

Inter IKEA, franchiser for the world’s biggest home furnishing brand, said sales at all IKEA stores and online grew 6.5% in the 12 months through August, or 3.5% measured in local currencies, to 44.6 billion euros ($43.3 billion).

Inflation and [supply chain issues](https://www.financedigest.com/uks-j-d-wetherspoon-returns-to-profit-as-supply-issues-ease.html "UK’s J D Wetherspoon returns to profit as supply issues ease") impacted FY22 sales, and led to rising costs and higher prices. That means [sales have grown in money](https://www.financedigest.com/are-compliance-and-anti-money-laundering-aml-regulations-hurting-your-sales.html "Are compliance and anti-money laundering (AML) regulations hurting your sales?"), but sales quantities have not kept up,” Inter IKEA said in a statement.

In addition, [supply chain shortages made it difficult to keep](https://www.financedigest.com/strained-supply-chains-keep-u-s-producer-prices-hot.html "Strained supply chains keep U.S. producer prices hot") IKEA shelves full,” it said.

Inter IKEA CEO Jon Abrahamsson said in an interview retailers’ [sales volumes had not increased during the year](https://www.financedigest.com/home-battery-sales-in-germany-may-surge-59-this-year-study.html "Home battery sales in Germany may surge 59% this year -study"). He added that Inter IKEA had not passed on all input [cost increases to the retailers](https://www.financedigest.com/amazon-other-retailers-revamp-free-shipping-as-costs-soar.html "Amazon, other retailers revamp ‘free’ shipping as costs soar"), but had assumed some itself.

Ingka Group, which owns the bulk of stores including those in main market Europe, and the closed ones in Russia, said separately its sales rose 5.6%, or 2.2% in local currencies, to 39.5 [billion euros](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility").

The [group said in a statement sales](https://www.financedigest.com/crown-agents-bank-owner-explores-sale-of-british-payments-group-sources.html "Crown Agents Bank owner explores sale of British payments group –sources") grew in most of its markets and availability of products improved overall.

[STRONG DEMAND](https://www.financedigest.com/produced-water-treatment-systems-market-fuelled-by-strong-demand-in-north-america.html "Produced Water Treatment Systems Market Fuelled by Strong Demand in North America")

Ingka CEO Jesper Brodin, who in March said price hikes would average 12% in the fiscal year amid [soaring raw material costs](https://www.financedigest.com/britain-delays-major-rail-project-hs2-as-costs-soar-again.html "Britain delays major rail project HS2 as costs soar again") and supply chain disruptions, said on Thursday Ingka had been able to start lowering prices again this summer as stocks started filling up thanks to recovering supply chains.

Brodin said sales growth improved too towards the end of the year, to double-digit figures, and that so far in the new fiscal year, demand remained “incredibly [strong” despite an overall drop in consumer confidence](https://www.financedigest.com/ecbs-villeroy-rate-hike-signals-strong-confidence-in-european-banks.html "ECB’s Villeroy: rate hike signals strong confidence in European banks") due to the energy crisis, soaring cost inflation and the war in Ukraine.

We currently don’t [see any big slowdown](https://www.financedigest.com/adecco-sees-signs-of-a-hiring-slowdown-at-start-of-2023.html "Adecco sees signs of a hiring slowdown at start of 2023") tendencies,” he said, adding that visitor numbers to stores kept increasing.

But we have [deep respect for the year](https://www.financedigest.com/deep-fryer-machine-market-one-the-most-booming-industry-in-upcoming-years-due-to-global-demand-in-industry-by-2028.html "Deep Fryer Machine Market| One the Most Booming Industry in Upcoming Years Due to Global Demand in Industry by 2028") we are in …and we are prepared for a tough winter for people everywhere.

He said product [prices would continue to be adjusted depending on availability in specific markets](https://www.financedigest.com/german-residential-property-market-faces-risk-of-price-drop-diw-study.html "German residential property market faces risk of price drop – DIW study").

Ingka was also in the process of opening a “store-in-store” that offers IKEA’s products to help households reduce water and [energy consumption – such as led lighting, solar panels and battery chargers, alongside advice on how to reduce energy bills](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record").

IKEA in March paused [operations in Russia](https://www.financedigest.com/kfc-franchisees-in-russia-ask-govt-to-halt-sale-of-stores-to-local-operator-ria.html "KFC franchisees in Russia ask govt to halt sale of stores to local operator – RIA"), which last year accounted for more than 4% of Ingka’s sales.

Inter [IKEA in June put its factories in the country up for sale, and IKEA stores](https://www.financedigest.com/ikea-stores-owner-ingkas-annual-operating-profit-rises-9.html "IKEA stores owner Ingka’s annual operating profit rises 9%") remain closed, but Ingka’s shopping malls remain open. Brodin said on Thursday [Ingka had not yet decided whether to sell the IKEA stores](https://www.financedigest.com/ikea-stores-owner-ingka-says-campaigns-help-boost-store-visits-and-sales.html "IKEA stores owner Ingka says campaigns help boost store visits and sales").

($1 = 1.0309 euros)

(Reporting by Anna Ringstrom; Editing by Emelia Sithole-Matarise)


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