With many families renovating various spaces in their homes into office and study areas, Swedish home improvement company IKEA reported a 45% boost in online retail sales profits.
While the boost in online retail sales has been promising, the company’s profits reported a slight dip due to the coronavirus pandemic as it posted a 39.6 billion euros for the 2020 financial year compared to the 41.3 billion euros reported for the 2019 financial year.
However, the company said retail sales are recovering quickly as many stores re-open and are well covered by the high online sales.
The financial year report covers the period of September 1, 2019, to August 31, 2020, including data from IKEA franchisees.
The company’s statement discussed that many families have transformed portions of their homes into schools and study areas, while bedrooms were converted into workplaces and home offices. Meanwhile, backyards were converted into entertainment and amusement areas as lockdowns and stay-at-home orders forced many homes to become instant places to work, relax, and socialize.
With increased online retail activities, the IKEA website also reported four billion visits this year. The company said e-commerce expanded to three new markets, including China – an important milestone.
IKEA will expand to new markets like Mexico and the Philippines in 2021. Several locations will also open in existing markets while continuing to offer new products.
Inter IKEA Group CEO Jon Abrahamsson Ring said the company website, stores, and other locations complement each other to create a great customer experience all the way around.
“We’re pleased about online sales growth, but also very happy that customers still love our stores. People want to touch and try our products or get personal help. As a result, we welcomed 825 million visitors to stores and opened 33 new locations this year,” Ring said.
IKEA customers stay at home while remaining budget-conscious
The IKEA executive said that with the “uncertain times” many customers opted to spend more time at home while also being conscious of how they spend money.
“Low price is more important than ever, and our lowest-price segment accounted for more than half of IKEA retail sales this summer. Making IKEA even more affordable is continuously one of our biggest opportunities for the future,” he said.
The Swedish company also said they are continuing work to reduce the climate footprint and pledged to invest EUR 200 million in renewable energy and responsible forestry in the coming years.
IKEA continues to integrate sustainability into every step of their retail business – from raw materials and production through to IKEA customers’ homes.
“IKEA makes the biggest impact by offering products that are both affordable and sustainable. For example, I’m extremely proud of our new plant-based ‘meat’ ball, which tastes great and has a really good price. But its climate footprint is just 4% of the traditional IKEA meatball,” said Ring.
“This was a year of homecoming. We’re proud to have made IKEA more affordable, accessible and sustainable for people around the world,” he added.
Read More Stories: Global Healthcare Benefit Costs to Increase Over 8% in 2021