Despite the “unprecedented challenge”, profits of major IKEA retailers skyrocket

Stockholm — The Ingka Group, owner of most IKEA stores around the world, reported on Tuesday that annual profits surged against the backdrop of record demand for furniture as more people stayed at home due to a pandemic. Did.

Over the previous year, there were more temporary closures due to pandemic-related regulations, and operating profit for the 12 months to August was € 1.9 billion, up 31%, despite product shortages due to the global supply chain crisis. Sales increased 6%, above pre-pandemic levels. Online sales surged to account for 30% of total sales, up from 18% in the previous year.

Compared to the pre-pandemic fiscal year 2019, profits were still down 8% due to higher investment levels. Capital investment was € 3.2 billion, up 52% ​​year-on-year as Ingka accelerated investment in digitalization, new downtown store formats, existing stores, distribution and delivery networks.

Chief Financial Officer Juvencio Maeztu told Reuters that he expects sales to grow this year and profits to be at least as high as last year. He said investment levels probably remain as high as at least the past year.

“Our journey to create better IKEA advances in a world facing unprecedented challenges. COVID-19 impacts our business and the communities in which we participate. We will continue to give, “the company said in a statement.

“The global supply and transportation crisis requires resilient and flexible response. Product availability, inflation and raw material prices are expected to continue throughout the value chain until 2010. , And continue to reduce transportation challenges. “

Affordable furniture brand IKEA operates through a franchise system, with Ingka being the main franchise of brand owner Inter IKEA, with 392 stores, including the city store, and 73 smaller store formats.

Design and supply InterIKEA has absorbed significantly higher raw material and shipping costs over the past year, but supply-related costs remain high, flagging retailers to raise prices this year. rice field.

Inca Maetsu said in an interview that there is no denying that the Incas will raise prices again this year.

Anna Ringstrom