Eurozone woes can’t hurt IKEA as sales build
FLATPACK furniture giant IKEA has said its revenues in Europe will keep growing this financial year, despite an underwhelming Eurozone economy.
The privately-held Swedish firm was buoyed by a lift in sales at its Spanish, Italian and Portuguese stores, which had picked up in the financial year ended 31 August 2014.
Boss Peter Agnefjall said consumer spending was up although net profit remained flat at €3.3bn, (£2.4bn) due to increased staff costs.
Agnefjall said IKEA, known for its self-assembly furniture, did not fear deflation because its business model was focussed on keeping prices down.
Lower purchasing and transport costs helped it to reduce prices by an average of one per cent in 2013-14.
However, a weak Europe remains a challenge for a group aiming to grow sales to €50bn by 2020, which would require an increase of nine to 10 per cent a year — well ahead of the current growth rate.
Agnefjall said that goal was a “guiding rail” rather than a “target hammered in stone”.
IKEA, which has 222 of its 315 stores in Europe, had previously said sales rose 5.9 per cent in 2013-14 to €28.7bn.
It said yesterday that rental income, total revenue was €29.3bn, a 2.8 per cent increase. It did not release a separate figure for its European stores.