Ikea’s retail sales fell 2% to €43.8bn in the year to August 2026, hit by weak consumer confidence and geopolitical turmoil. Brand owner Inter Ikea reported a 7% drop in net profit to €1.4bn, despite a €1.2bn investment to cut prices on over 1,000 products. CEO Jakub Jankowski called the year “challenging” and warned 2027 may be similarly tough.
The price cuts of 15-25% on items like Billy bookshelves and Kallax units aim to boost affordability across 20+ European countries. This is the second major pricing push in four years; the 2023 cuts initially hurt revenues and halved profitability. Ikea is also shifting from large out-of-town stores to smaller city-centre locations, opening about 90 new stores last year and planning 50% more in 2026-27.
The company, controlled by charitable foundations in the Netherlands and Liechtenstein, can invest long-term without short-term market pressures. Inter Ikea’s own revenues fell to €25.9bn. Ingka, which generates 90% of retail sales, will report results this month.
Source: Financial Times Companies · Summarized by HeadlinesBriefing