Ikea achieves strong growth despite investing in sustainability

Swedish furniture chain Ikea has had an excellent fiscal year, with a 7.4 % turnover increase to 35.1 billion euro. Its net profit also grew to 4.2 billion euro, despite major sustainability investments.

783 million customers

“Thanks to our sustained growth and profitability, we can decide our own path and we have the flexibility to move quickly“, CEO Peter Agnefjäll said. “At the same time, we have the freedom to create a long-term strategy and to invest.” In total, Ikea welcomed 783 million customers in its past year, which ended on 31 August 2016, with China as one of its fastest-growing markets. Germany, France, the United Kingdom, the United States and Sweden also achieved decent growth.

Dutch growth was comparable to last year’s growth, while Belgian turnover grew 11 % thanks to two new store openings. Ikea opened twelve new stores and nineteen Pick Up and Order points (the company’s new, smaller store formula) all across the globe last year.

Invest in sustainability and employees

A large share of Ikea’s investments will tackle the company’s sustainability: it announced today it will put aside one billion euro towards sustainability investments, which now total more than three billion euro. Since 2009, the company has invested 1.5 billion euro in wind and solar energy, adding another 600 million euro over the next few years. The goal is to have renewable energy match the company’s energy output by 2020.

“Companies that look towards the future have plenty of options to contribute and take advantage of a clean economy”, Agnefjäll said. “We are determined to have a positive influence on the planet and its inhabitants, which is in line with our vision to create a better existence for as many people as possible.”

On top of that, the company will also put 443 million euro into loyalty and bonus programs for its employees. 180 million euro will be put in its Tack! loyalty program, which hands out money for retiring employees. 335 million euro will go towards its bonus program.