IKEA Announces 13% Sales Growth In The UK

• IKEA announces 13% sales growth in the UK, as consumers continue to invest in life at home post pandemic

IKEA UK has today announced total sales of £2.2 billion for the year ending 31st August 20221, which marks double-digit sales growth of 13% compared to the previous 12 months.

Post pandemic, the retailer has continued to see strong appetite from customers to invest in their life at home, with growth seen across all areas, particularly within kitchen and dining equipment, textiles and storage – both in-store and online.

Peter Jelkeby, Country Retail Manager and Chief Sustainability Officer, IKEA UK said:
“We saw consumers returning to our stores while online sales remained strong with high demand for a convenient shopping experience. To meet these needs, we opened our first small store on the high street, created new ways to meet customers remotely and in-store, and launched new ways to deliver orders. With a variety of stores, service offers and digital solutions that complement each other, our aim is to be there for our customers, however they want to meet us.”

Becoming more accessible

As consumer shopping habits continue to change following the pandemic, IKEA UK’s total online sales have grown to 36% compared to 19% pre-pandemic levels in financial year 2019². Whilst online sales are now twice as high compared to financial year 2019, consumers also started coming back to IKEA UK’s stores, with store visitation increasing by 34% compared to last year. To meet these changing consumer behaviours, the retailer has continued investing in its long-term vision to become more convenient and accessible by bringing IKEA closer to where customers live, shop, and socialise.

IKEA UK opened its first small store on the high street in Hammersmith, West London. It also announced the opening of a store on Oxford Street, London, and new Plan & Order Points in the North West of England (in Aintree, Preston, and Stockport with more to follow); making it easier and more sustainable to shop than ever before.

By investing nearly £50m in its fulfilment network, IKEA UK has been able to meet the changes in customer demands and become more customer-centric:

• £33 million investment in a 420,000 m3 fulfilment centre in Dartford, Kent, expanding fulfilment capacity by 20% in London, due to open May 2023.
• New collection service with Tesco launched with seven collection sites operational, with a further three in planning in the Southeast.

IKEA’s journey to becoming climate positive by 2030³

Whilst growing sales and numbers of visitors, IKEA UK achieved a 14% absolute reduction in its operational climate footprint4 over the past year as it works towards contributing to the overall commitment of IKEA to becoming circular and climate positive by 2030.

To enable this decrease, IKEA UK made significant investments in energy efficiency, with new technology trials for reducing carbon emissions and behaviour changes to decrease energy use in stores and distribution centres, as well as cut waste.

Looking ahead, investments in solar panels, electric vehicles, waste minimisation, and heating and cooling solutions will take IKEA UK closer to its climate goals.

Investing in people during challenging times

IKEA UK continued its efforts to ensure co-workers were supported in these challenging times. As a member of the Living Wage Foundation, IKEA UK will meet the new rates of £11.95 an hour (London) and £10.90 (rest of the UK) as of January 2023. In response to the cost-of-living crisis, more recently the retailer also announced investments in financial, physical, and mental wellbeing measures, to provide further support to co-workers during these especially challenging times.

During the year, IKEA UK introduced its first Menopause policy and, through the UPPNÅ programme, has successfully offered work placements to 85 refugees since the beginning of the programme in 2020, of which 72% have been retained in permanent contracts.

External impact

Despite strong financial performance, the major global and economic issues, the war in Ukraine and the subsequent inflationary pressure continued to have a significant impact on materials and transportation costs within the global supply chain, and in local energy and other costs. Consequently, IKEA UK’s operating margins reduced to 2.3%, from 3.1% in the financial year 20215.

After absorbing most of the increased costs over the last year, to remain financially resilient for the long term and to ensure its longevity as a business and employer, prices were adjusted across large parts of the range in financial year 2022 to reflect this increased cost-base.

Staying as affordable as possible for the many people remains the priority, and IKEA UK’s approach during this period has been to protect the prices of its most-loved and lowest-priced products. More recently, in response to the cost-of-living crisis, IKEA UK has implemented a wide range of offers, through the IKEA Family programme, to support its customers in making savings where it can see they’re most needed.

Peter Jelkeby ends: “A post-pandemic backdrop of increased living costs, supply chain challenges and macro-economic instability inevitably shaped our business in 2022.

“In the face of these changes, our long-term vision to create a better everyday life for the many people was our guiding compass for short and long-term decision making, and our results reveal the positive impact of this approach with healthy financial results representing our financial stability and resilience amidst great change.

“In 2023, we will continue on our journey to create better homes for customers, better lives for co-workers and communities, a better company for now and generations to come, and a better planet for all.”

Source : IKEA

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.