Ikea's Irish and UK sales net €1.4bn

Ikea today said it had become the UK’s leading home furnishings retailer after seeing its sales edge ahead during a difficult year for the sector.

The Swedish furniture giant said like-for-like sales in the UK and Ireland, where it has 19 stores, had risen by 1% during the 12 months to the end of August to £1.2bn (€1.4bn).

The sluggish growth bucked the trend for the home furnishings sector, with the market shrinking by 7.4% during 2009 as consumers tightened their belts.

As a result, the rise was enough to give Ikea a 6% market share, making it the UK’s most popular supplier of everything for the home from beds and tables to curtains and rugs for the first time, according to figures compiled by Verdict Consulting.

Growth in kitchen sales was particularly strong during the year, rising by 11% on a like-for-like basis.

The group said its new full kitchen service package, under which it will plan, deliver and install kitchens, had proved to be very popular since its launch.

Other strong areas of growth included sales of storage solutions, which were also up 11%, while sales of dining room furniture rose by 9% and children’s products were up 4%.

Ikea said customers had become more conscious of price doing the year, leading to it cutting the cost of a number of lines.

In a bid to continue achieving sales growth going forward, it cut prices by 5% across its entire range in September.

The group also plans to launch an improved home delivery service next year, increasing the number of different products customers can buy online by more than 500, from the current level of 3,700. It also plans to introduce a lower home delivery charge.

Martin Hansson, IKEA UK and Ireland’s country manager, said: “It has been another challenging year for us but despite the overall home furnishings market being in decline, we have delivered a small growth.

“By focusing on two key areas – affordability and improved service levels – I am convinced we will continue to see stable, if not increased visitation to our Ikea stores over the coming period. I believe we will achieve growth by continuing to lower our prices.”

The group spent £11m (€12.7m) improving its stores during the year, including adding self-service checkouts at 12 of its outlets.

Today is only the second time that Ikea has published sales figures for the UK and Ireland. It broke with its previous secrecy at the beginning of October by publishing profit figures for the whole group for the first time ever.

It said it had seen group-wide sales growth of 1.4% to €21.8bn during the year to the end of August, with its net profit increasing by 11.3 % to €2.5bn.

The Ikea Group operates 280 stores in 26 countries, with a further 34 stores run by franchises in 16 countries and territories.