Ikea profits slip amid increased focus on online business

DIY retail giant Ikea has reported a 10% decrease in profits for the year to the end of August 2019, amid an increased focus on its online business.

The retailer said online sales growth was close to 50% during the period and is now surpassing 10% of total retail sales. Despite the drop in profits, Ikea’s total retail sales rose by 5% at a constant currency rate during the year.

Additionally, revenues for the Ingka Group, which owns Ikea, increased increased by 5.3% €39.1bn (£33.4bn) and pretax profits also increased by 19% to €2.5bn (£2.1bn).

The group said despite “challenging times for retail”, it continues to grow in three areas: its existing stores, online and new customer meeting points such as planning studios and smaller city stores.

Juvencio Maeztu, CFO and deputy CEO, Ingka Group, said: “With more than 166,000 dedicated co-workers and many committed suppliers around the world, 839 million visits to our stores and 2.6 billion visits online, we have a unique opportunity to enable and inspire even more people to live a better and more sustainable life at home, within the limits of the planet.

“For us, it has always been important to handle resources in a respectful way, both with a short-term perspective but also for generations to come. We want to be a part of creating solutions for the challenges our planet is facing, and we are taking bold steps securing our ambition to become climate positive by 2030.”

He added: “It is even clearer that financial performance and sustainability go hand in hand, and for us this is how we will grow, stay relevant and remain profitable, long term.”