Swedish furniture giant Ikea has managed to keep its profits level in 2014, compared to the year before. Its total turnover grew 6 % however, as at the same time, the company also lowered its prices.
Lower prices and employee bonuses
Ikea's 2014 turnover reached 28.7 billion euro, up 5.9 % compared to 2013, mainly thanks to growth in China and the United States - even though the European markets have also managed to grow.
Its net profit, 3.3 billion euro, was almost as high as the year before. There were several reasons for its lack of profit growth: Ikea's prices dropped 1 % on average, while it has also given 98 million euro to employee bonuses in 2014. On top of that, another 200 million euro was invested into its employee loyalty program. To compare, its 2013 net profit grew 3.1 %.
Its goal, by 2020, is to reach a 50 billion euro turnover with new store openings (like a first store in Croatia last year) and an expansion of its online activities. Currently, it has 315 stores in 27 countries, welcoming 176 million visitors per year.