Ikea brand owner says prices are coming down as profits more than double

While Inter Ikea started lowering prices to its franchisees in the last four months of its financial year, it would take some time before customers in stores would feel the full effect of the decreases, Mr van Dam said.

The largest owner of the Ikea furniture brand, Inter Ikea, said prices are coming down as profits double and cost pressures ease.

Inter Ikea's annual profit more than doubled and it predicted more price reductions in the months ahead.

The company, which supplies the stores to which it franchises the brand, made a pretax profit of almost €2bn in the year through August, up from €931m a year earlier when it struggled with high costs and the effects of closing its Russian factories.

CEO Martin van Dam told Reuters that results were returning to normal after a disrupted 2022.

"We were trying to make sure the retailer had the right price, and with the delay of (higher) prices we ended up harbouring a lot of the costs that year. If you look at FY21, the returns are similar to now," Mr van Dam said.

The company said it would continue to lower prices as long as costs fell further.

"Costs trending downwards should positively affect prices for Ikea customers in the coming year and beyond," it said in a statement.

While Inter Ikea started lowering prices to its franchisees in the last four months of its financial year, it would take some time before customers in stores would feel the full effect of the decreases, Mr van Dam said.

Reuters