Ikea net profit surges in 2023 as sales rise

Swedish furniture giant Ikea saw a five-fold increase in net profit for its full-year 2023 which ended in August, boosted by rising sales, Ingka Group which owns most Ikea franchises said on Wednesday (Nov 29).

Ingka’s net profit was 1.5 billion euros (S$2.19 billion) for the year, up from 300 million euros in 2022 when earnings were hit by its pullout from the Russian market over the war in Ukraine.

Ingka called it a “good performance”, despite the fact that “economic instability, geopolitical volatility, and the continued after-effects of the pandemic made for challenging moments in 2023.”

Operating profit was stable, while Ingka’s sales rose by 5.4 per cent to 44.3 billion euros.

Ingka accounts for more than 90 per cent of Ikea’s sales, which totalled 47.6 billion euros in 2023.

The retailer announced last month that it had begun lowering its prices on thousands of items in September to stem two years of falling sales volumes attributed to soaring inflation.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Ingka said on Wednesday it would pay out 311 million euros in performance-based bonuses to its employees and 103 million euros to its complementary pension fund for employees with more than five years seniority.

The company said it was committed to further reducing the staff turnover rate that rose during the Covid pandemic.

“We had a 21.4 per cent staff turnover rate before and now we’re down to approximately 18 per cent,” said head of human resources Ulrika Biesert. AFP