Why Ikea ends city trials and returns to its classic concept

Ikea is ending its trials with smaller city-centre stores, throwing its weight behind economies of scale. A focus on price reductions, to capture market share, fits neatly into that strategy.

Market share first

Ingka Group (the company that operates most Ikea stores) saw its sales decrease by 5.5 % in the past fiscal year, but CEO Jesper Brodin does not consider that to be much of a problem. The Swedish giant can even afford to allow its net profit to be halved by price reductions: with an operating profit that still amounts to 1.3 billion euros, that is just a small price to pay for more market share.