IKEA is cutting prices by 15%-25% on more than 1,500 products in Europe as it seeks to entice customers under pressure from higher living costs. The price cuts, which start immediately, come after the Swedish furniture group invested heavily last year to bring prices down on thousands of products across markets. Ingka Group, which owns most IKEA stores globally, other IKEA franchisees, and IKEA brand owner Inter IKEA Group said Tuesday that they are investing 1.2 billion euros ($1.39 billion) to lower prices across Europe. In Germany, more than 1,500 products will have their prices lowered by an average of 20%, while in the U.K., prices will be reduced on hundreds of home furnishing products and accessories. In Italy, prices on hundreds of products have been reduced by an average of 22%.

To support affordability beyond Europe, Ingka Group said it will also invest 70 million euros to help offset inflationary and currency pressures in Asia and North America.

"The investment is not an activity or short-term campaign – it's about making IKEA more affordable when people need it most, even if it means accepting a lower margin," said Ingka Group Chief Executive Juvencio Maeztu. "At the same time, we are investing to make IKEA more accessible by opening many smaller stores as part of our omnichannel experience."

Ingka Group is working to open more compact stores, part of a strategic move into more localized store formats to sell its furniture closer to its customers. After decades of operating large IKEA stores on the outskirts of cities, it is expanding into downtown locations in major cities and also moving into areas where it is yet to have a presence.