Ikea owes strong growth to online acceleration

Last financial year, Ikea has managed to increase its retail turnover considerably. The group’s online business is growing fast, while the number of visitors to its stores remains at the same level. The retailer is opening even more small shops and planning studios in large cities.

City shops and home delivery

Ikea’s parent company, the Ingka Group, reports a retail turnover of 36.7 billion euros for the past financial year (1 September 2018 to 31 August 2019): an increase of 5 % compared to last year, at constant exchange rates. Ikea Belgium recorded an increase of 7 % and achieved a turnover of 977.5 million euros, while in the Netherlands turnover grew by 6 % to 1.324 billion euros.

According to the company, it owes its progress largely to investments in new city stores worldwide and to the development of a network for home delivery. The Ingka Group wants to ensure that customers can shop at Ikea whenever and wherever they want.

Online responsible for 10 %

The number of shop visits remained more or less the same, with a total of 839 million visitors – compared to 838 million in the previous financial year. The number of visitors in the Belgian stores has risen by 2.2 % to 15.5 million visitors. In the Netherlands, the stores received more than 25 million visitors.

The number of online visitors worldwide increased by 10 % to almost 2.6 billion and online sales of the Ingka Group grew by almost 48 % this year, so that online sales now represent about 10 % of total sales. Ikea.be welcomed 50 million visitors last financial year, an increase of 17 %. This is the first year that Ikea Belgium can record the results for a full financial year. Online accounts for 5.3 % of total Belgian turnover. Last year the completely renewed ikea.nl went live as well: together with France, Ikea Netherlands was the first to launch the new shoppable Ikea app. 

Store openings

Ikea opened seven new classic stores over the past year, and eleven smaller stores and planning studios in major cities such as Moscow, New York, Paris and London. Stores are planned in Copenhagen, Shanghai and Tokyo.

Ikea also continues to invest in Belgium, says CEO Catherine Bendayan: “The fantastic figures for sales and the number of visitors in Belgium show once again that our stores remain the cornerstones of our organisation. That is why the shops in Zaventem and Liège were renovated to share even more inspiration with our customers. In addition, we recently opened a pop-up store in the centre of Leuven, where we offer our customers personal advice and guidance.”

Various pilot projects are currently underway in the Netherlands, such as hiring out furniture packages to students in Amsterdam, home delivery of dishes from the Ikea Restaurant in Groningen via Thuisbezorgd.nl and a test with cashless store at Ikea Eindhoven. In 2020, the retailer in Amsterdam will start delivering orders with electric cars only. The company wants to be completely switched to electric home transport by 2025.

Sustainability

CEO Jesper Brodin of the Ingka Group is satisfied with a “very positive year”: he said currently the chain is in one of the greatest transition periods in its history, but continues to deliver strong results. Brodin went on to say that his “simple but powerful vision” was to create a better daily life for as many people as possible.

He also emphasised the importance of sustainability for the group: in future, the national retail managers (CEOs) will therefore also perform the role of chief sustainability officer (CSO). “We know that our future success depends on our ability to have a positive impact on people and the planet. That’s why we integrate the sustainability aspect into all our retail activities”, Brodin said.