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Ikea cuts prices, announces bonuses, crediting strong sales in 2023

Ikea is extending its price reductions beyond the temporary holiday promotions in November and December, emphasizing its ongoing commitment to making its products more affordable. 

Ikea cuts prices, announces bonuses, crediting strong sales in 2023

The company's commitment to broader price cuts was announced in conjunction with the disclosure of robust results during its 2023 fiscal year, wherein Ikea U.S. reported total sales of goods and services amounting to $6.3 billion. This impressive figure reflects an overall growth of 6.6%, with a notable 3.3% increase in e-commerce and online visits compared to the preceding year.

CEO and chief sustainability officer Javier Quiñones,  at Ikea U.S emphasized the company's dedication to sharing its success with both co-workers and customers. Quiñones stated, "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.”

As part of this initiative, Ikea is highlighting specific products in its catalog, such as the popular Billy bookcase, which will receive price cuts of at least 20%. These reductions, announced under a "New Lower Price" promotion in November, are in addition to the seasonal pricing under its "24 Days of Deals" and Winter Sale. 

In a move to recognize and reward its workforce, Ikea U.S. is dispersing $54.5 million in bonuses among its employees as part of the "One Ikea Bonus" program. Workers at two-thirds of Ikea's U.S. units will share in these performance-driven bonuses. 

In conjunction with the bonus payouts, Ikea U.S. has also announced its contribution to the Tack! program, which funds retirement benefits for workers. This comprehensive loyalty program extends to employees throughout the Ingka Group, the holding group under which Ikea U.S operates.

Looking ahead, Ikea's growth plans in the U.S, involve a significant investment of $2 billion over three years, with the anticipation that the U.S, will eventually surpass Germany as its largest market. The company has introduced new store formats, including the "plan and order" format, which is smaller than traditional warehouse stores and focuses on kitchen, living room, and bedroom furniture. 

Ikea has expanded its pickup points, providing alternatives beyond delivery for customers residing outside the range of existing stores. The company plans to open at least 900 pickup locations within the next three years, with these new locations expected to create at least 2,000 new U.S jobs by completion. As of the end of November, Ikea's franchise system encompasses 55 retail locations in the U.S.

Ikea's commitment to affordability, coupled with strategic expansions and investments, underscores its mission to make quality home furnishing solutions accessible to a broad spectrum of consumers, reinforcing its position as a leader in the furniture retail industry.