IKEA price cuts: $1.4 billion drive to slash European prices amid cost‑of‑living squeeze

IKEA price cuts reshape European market

IKEA announced a $1.4 billion investment to trim retail prices across Europe, with discounts ranging from 15 % to 25 % on furniture, kitchenware and storage solutions. The move, described by Ingka Group chief Juvencio Maeztu as “making IKEA more affordable when people need it most,” comes as euro‑area inflation peaked at ↓ 9.2% in 2022 and furniture prices sit roughly ↓ 24% above 2015 levels, according to Eurostat.

“People have thin wallets, but they still have needs, dreams, and frustrations,” Maeztu told Reuters.

Last year the Swedish giant’s full‑year sales slipped ↓ 1% to €44.6 billion, a trend the company attributes to cautious consumer spending despite a modest 3 % rise in store traffic. The broader backdrop includes soaring housing costs that dampen the “new home, new furniture” cycle, while confidence indices in the Netherlands fell from –30 to –44 in a single month, a dip linked to the ongoing pandemic fallout and the Iran conflict.

Retail rivals are matching the pressure. Walmart earmarked $3 billion of tariff refunds for price reductions, Target pledged nearly $1 billion, and Kroger rolled out cuts on thousands of items, a strategy scrutinized by Bloomberg. Analysts note that IKEA’s foray into a second‑hand marketplace, launched in five countries this year, signals a longer‑term shift toward value‑driven consumption.

Correction: An earlier dispatch misstated the year of the price‑index reference.