Ikea price cuts are coming. In addition to the season’s holiday sales that end on Dec. 24, the company committed to broader price reductions for U.S. shoppers. The furniture retailer touted strong results during its 2023 fiscal year as it announced the price reductions, along with $54.5 million in bonuses that will be dispersed among many Ikea U.S. workers.

“We are proud to share the success of another strong sales year with our co-workers and customers. When times are tough, we view it as our responsibility to provide quality and affordable home furnishing solutions and services that make everyday life at home a little easier,” Javier Quiñones, CEO and chief sustainability officer at Ikea U.S., said in a statement. “Lowering prices is not just a promotion; it is our promise to our customers. Our priority is to remain as affordable as possible and continue reducing prices whenever we can to ensure that our products are accessible to all and that dream homes are within reach for the many.”

Ikea sales for its 2023 fiscal year

In the most recent fiscal year, which ended on Aug. 31, Ikea U.S. reported $6.3 billion in total sales of goods and services. That activity represented overall growth of 6.6%, with 3.3% growth for its ecommerce and online visits over the previous year.

Ikea cited its Billy bookcase as an example of products in its catalog that will receive price cuts of at least 20%. Those lowered prices, announced in November under a “New Lower Price” promotion, will come in addition to seasonal pricing under its “24 Days of Deals” and Winter Sale. The announcement framed the ongoing adjustments as part of its larger effort to prioritize affordability, accessibility and convenience, acknowledging financially challenging times among consumers.

U.S. consumer spending was up 0.2% on a month-over-month basis (to $41.2 billion) in October, which was weaker growth than the 0.7% increase seen in September.

Bonuses for Ikea’s U.S. workers

Ikea indicated that workers at two-thirds of its U.S. units would share in bonuses as part of “One Ikea Bonus,” a performance-driven bonus program.

“Our co-workers are the heart of Ikea, and our success in the U.S. is a reflection of their commitment to our values and vision,” Neena Potenza, chief human resources officer, Ikea U.S., explained in the announcement. “By investing in our people, we are building an Ikea for the future. Our priority is to remain as affordable as possible and continue reducing prices whenever we can to ensure that our products are accessible to all and that dream homes are within reach for the many.”

In conjunction with the bonus payouts, Ikea U.S. also announced that it would contribute to its Tack! program that funds retirement benefits for workers. The loyalty program extends to employees throughout the Ingka Group, the holding group under which Ikea U.S. operates.

Ikea’s growth plans

Ikea announced in April that it would invest $2 billion over three years to grow its presence in the U.S. It eventually expects the U.S. to surpass Germany as its largest market.

Recent locations for new stores have included San Francisco; Arlington, Va.; and Southlake, Texas. New store formats are slated for Fairfax, Va.; Gaithersburg, Md.; and Katy, Texas. Ikea’s new “plan and order” format is smaller than its traditional warehouse stores, focusing on kitchen, living room and bedroom furniture. Unlike larger-format stores, these locations serve as showrooms without furniture immediately available to take home.

In addition, more than 20 new pickup points have debuted in the U.S., expanding alternatives beyond delivery for customers living out of range for existing stores. At least 900 pickup locations are planned to open within the next three years. The new locations are expected to employ at least 2,000 new U.S. workers by the time they are completed. The Ikea franchise system currently encompasses 55 retail locations in the U.S. as of the end of November.

Ikea ranks No. 7 in the Europe Database, Digital Commerce 360’s ranking of the largest online retailers in the region.

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