IKEA UK has announced substantial growth in the 2023 financial year, with sales increasing by 11.9% compared to the previous year, generating a turnover of £2.46bn ($3bn).
This performance coincides with IKEA’s 80th anniversary year and is part of the broader success of the Ingka Group, which reported a global retail sales increase of 5.7% to $41.7bn ($43.9bn).
Continued UK Investment
In an effort to bolster its physical and digital presence, IKEA UK continued its omnichannel journey. During FY23, 38.5% of total sales were made online, up from 35.8% in FY22.
The company also opened a new distribution centre in Dartford, capable of delivering one million orders annually, facilitating faster and more sustainable home deliveries.
This centre operates using 100% renewable energy and employs a fleet of electric vehicles to reduce CO₂ emissions. Furthermore, IKEA invested £4.5m in electric vehicle charging infrastructure to achieve 100% zero-emissions deliveries by 2025.
To enhance accessibility, three Plan & Order Points were established in Aintree, Stockport, and Preston, focusing on kitchen, bedroom and living room planning. IKEA UK intends to expand its physical presence in the northwest and beyond, with new locations set to open in FY24.
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By GlobalDataAdditionally, a new city store on Oxford Street was inaugurated during FY23, attracting one million new visits, marking a 2.2% increase.
To cater to customers through diverse channels, IKEA introduced 15 new external locker pick-up points in collaboration with Shift, bringing the total to 24. A trial of 12 mobile pick-up points in partnership with Tesco was also conducted.
In the digital sphere, IKEA expanded its capacity and capabilities to serve customers remotely, resulting in a 24% year-on-year growth in remote sales.
Life at home in a cost-of-living crisis
With the ongoing cost-of-living crisis and more people spending time at home, the demand for specific IKEA products highlights evolving priorities. Increased remote work led to a surge in sales for adaptable wardrobe systems like PAX and KOMPLEMENT, which grew by 49% and 39%, respectively.
The BESTÅ storage system, known for its modular and customisable design, also saw a 25% increase in sales.
The ‘People and Planet Positive’ (PPP) range, aimed at saving money and promoting sustainability, witnessed substantial growth. Sales of PPP products surged by 42% in FY23, representing nearly a third (31.8%) of total sales, compared to 24.6% in FY22.
Customers prioritised reducing food waste, as sales of IKEA’s 365+ food containers increased by 41% and KORKEN storage jars and reusable bottle purchases grew by 23%.
With a focus on enhancing life at home, health and wellness trends influenced purchases. Air purifier sales nearly doubled (+88%) over the past year, with the UPPÄTVIND air purifier, priced at £29, emerging as a bestseller.
IKEA UK & Ireland CEO and chief sustainability officer Peter Jelkeby emphasised the company’s commitment to making a positive difference in customers’ lives, especially those facing economic challenges.
The company says it absorbed significant cost increases to mitigate price rises, investing in promotions and special offers, including its first-ever Easter Sale.
As supply chain costs begin to stabilise, IKEA also says it is committed to reducing prices to support its customers during challenging economic times.
