NETHERLANDS - Inter Ikea Group has reported that the total retail sales for Ikea in the financial year 2023 (FY23) reached EUR 47.6 billion, marking a 6.6% increase compared to FY22. This remarkable achievement was realized despite the ongoing challenge of reduced sales quantities.
FY23 was characterized by a concerted effort to make Ikea more affordable, ensuring that a wide range of people can continue to enjoy the Ikea shopping experience in the present and future. The Inter Ikea Group also intensified its focus on designing high-quality products by enhancing material development and optimizing production processes, all with the goal of offering customers lower prices.
"The increased focus on reducing material and manufacturing costs led to a decrease in Ikea retail prices by the end of FY23. In times of high inflation and economic challenges for many, the demand for affordable home furnishing solutions remains high. Ikea will continue to prioritize customer affordability, just as it has always done. Looking ahead, our main objectives for Ikea are to become even more affordable, accessible, and sustainable," stated Jon Abrahamsson Ring, CEO of Inter Ikea Group.
In FY23, product availability in Ikea stores improved, overcoming global supply chain shortages from previous years. This was achieved through closer collaboration with partners throughout the entire Ikea supply chain to address logistical constraints and enhance inventory management.
Ikea continued its expansion into city centers, making its products more accessible to customers by developing smaller store formats located closer to where people live and work. Over 70 new Ikea sales locations opened in the past year, with a majority being small stores and plan & order points. Notable additions included a small store in the center of Copenhagen, tailored to local needs and designed for better accessibility for the city's cyclists. Other small stores were opened in Madrid, Almeria, Rome, Surabaya, Bavaro, Cabo, San Francisco, and Toronto. In addition, FY23 marked the groundbreaking for the first Ikea store in New Zealand. Furthermore, just one month after FY23 concluded, Ikea entered a new market in South America with the opening of a 26,000 m2 store in Colombia.
In total, Ikea stores welcomed 860 million visitors in FY23, compared to 822 million in FY22. Online sales have stabilized at 23%, up from 22% in FY22, although online visitors to Ikea channels decreased in FY23 to 3.8 billion, largely due to the easing of COVID-19 restrictions and a return to in-person shopping.
Efforts to reduce the environmental footprint and lower the climate impact continued. Initiatives included the introduction of bio-based glue alternatives after a decade of internal research, which is expected to reduce fossil-based glue usage by 40% and the climate footprint from glue by 30% by FY30. V also launched an industry-first global wood supply map, enhancing transparency by publicly showing the origins of the wood used in Ikea products. Another noteworthy initiative is the SILVERSIDA product series, representing a successful example of Ikea using ceramic production waste on a large scale to create new tableware. Approximately 65-70% of SILVERSIDA products are composed of internal waste at the factory.
FY23 marked the 80th anniversary of Ikea, founded by Ingvar Kamprad in 1943. To celebrate this milestone, Ikea revisited its "treasure chest" to reimagine customers' favorite designs. Iconic products were reimagined with fresh, joyful colors, new materials, and the latest production techniques in a collection called Nytillverkad.
