Ingka Group (Ikea) sees turnover drop but e-commerce booms

The corona pandemic has caused a digital acceleration at Ikea. The retailer managed to save the furniture during the lockdowns thanks to the roll-out of click & collect services.

60% online growth

Ingka Group, owner of most of the Ikea stores, has just announced its financial results for the broken financial year 2019-2020, which ended on 31 August. The retailer saw its turnover decrease by 4.8%, to 37.4 billion euro. A logical consequence of the corona pandemic: 75% of the shops were closed for an average of seven weeks during lockdowns. As operating expenses also increased, net profit fell to 1.2 billion euro (from 1.8 billion euro the year before).
 

Corona did mean an acceleration of digital developments for Ikea. The company converted its shops into fulfilment centres and launched click & collect services with contactless pick-up points. This led to an increase in online sales of up to 60% over the entire financial year. E-commerce now accounts for 18% of total sales.
 

The retailer speaks of a ‘solid performance’ given the difficult circumstances and saw a strong recovery in sales after the reopening of the stores. There is an increasing interest among consumers to improve life at home. The retailer is halfway through an ambitious transformation plan to become more affordable, accessible and sustainable. “We want to be part of the solution to climate change, which is why we will continue to focus our future investments to ensure a cleaner, greener and more inclusive recovery from Covid-19,” said CEO Juvencio Maeztu.