Online investment helps IKEA achieve growth
In FY19, IKEA UK enjoyed total sales of £2.120b (up from £1.965b in FY18). Sales were up +8% YoY (having grown +5.9% in FY18), while the retailer enjoyed a slight increase in market share – from 8.4% in FY18 to 9%.
This year, IKEA opened its most sustainable store to date, in Greenwich, which it says is +80% more energy efficient than building standards, and another step towards the retailer’s ambition to develop a fully circular business by 2030. It also opened a second planning studio, in Bromley.
Yet across its physical estate, IKEA recorded a footfall drop of -2.8%, which it attributes to changing consumer shopping preferences, including decreasing car ownership impacting the performance of its out-of-town stores. Online growth continued to cover the deficit – IKEA enjoyed online sales growth of +27%, and the channel now represents 19% of total sales (up from 15.5% in FY18).
As well as investing in its digital and physical channels, IKEA improved its distribution and fulfilment network, and expanded its assembly service.
Peter Jelkeby, country retail manager for IKEA UK and Ireland (pictured), comments: “Returning to IKEA in the midst of the biggest transformation in its history is both a pleasure and a privilege for me. The transformation of IKEA will bring a greater focus on affordability, convenience and being people and planet positive to create a new IKEA by 2021. During the first year of our transformation, we made our multichannel offering more flexible and accessible as we know that customers’ expectations and how they shop with us is changing.”