Ingka Group, the owner of most IKEA furniture stores, is planning additional price cuts as some input costs ease, its retail manager told Reuters on Monday, a reversal from price hikes introduced last 12 months to counter soaring inflation.
The world’s biggest furniture retailer raised prices in its fiscal 12 months at the top of August to pass on soaring raw material costs and provide chain disruptions. However it was in a position to lower some prices again towards the top of the period as stocks began filling up and provide chains recovered.
“We’re optimistic to proceed specializing in lowering prices where we are able to,” Tolga Oncu, Ingka’s head of retail, said in an interview on Monday. “I’m quite optimistic going forward.”
The moderation of some input costs, reminiscent of metal and sea transport, will allow the corporate to proceed the reductions, Oncu said.
Opportunities for efficiencies in operations will proceed to assist IKEA deliver profits while lower prices should attract recent cost-conscious customers, he added.
“We’re optimistic to proceed specializing in lowering prices where we are able to,” said Tolga Oncu, Ingka’s head of retail.REUTERS
Brand owner Inter IKEA, which is in control of supply, said this month input prices had begun to stabilize, and that promotional campaigns and lower prices on some popular products can be key to attracting cash-strapped shoppers.
High inflation has forced consumers the world over to tighten their belts with aggressive central bank rate hikes adding to fears of a worldwide recession and weaker demand.
“I feel our business model really specializing in lowering the costs and ensuring we’re even more cost-effective is paying off in times like this,” Oncu said.
Lower prices should attract recent cost-conscious customers, Oncu said.REUTERS
Oncu was speaking on a visit to India, a market IKEA entered in 2018, and where it currently has three traditional giant out-of-town big-box stores and two smaller inner-city stores. India is considered one of its fastest-growing markets and it has said it plans to take a position in further stores in addition to shopping malls.
It plans to open more stores within the Indian cities of Chennai within the south, Pune within the west and near the capital Recent Delhi.
