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PARIS — May 7, 2024 — Ikea is responding to the downturn in the furniture market by implementing a two-pronged strategy. The company is cutting prices and offering more services to stay competitive. Amid rising costs and a decline in the purchase of furniture, the company has been accomplished in France. The company’s plan to restore its dominance looks promising.
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As the furniture market faces meaningful challenges, ikea is implementing a strategy focused on affordability and personalized services to maintain its position.
The Economic Climate Weighs Heavily on Furnishings
The year 2024 proved arduous for the furniture industry.
Industry figures indicate a market fell 6.3 % in value and 12 % in volume
.This represents the most substantial decline since the 2008 financial crisis.
The downturn affected all sectors, including living room furniture, bedrooms, kitchens, and home decor, as French households reduced spending.
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Rising Cost of Living:
Consumers are delaying non-essential purchases due to the increasing cost of living. -
Decline in Real Estate:
Fewer real estate transactions translate to reduced demand for new furnishings. -
Budgetary Constraints:
Furniture purchases are ofen the first to be cut during periods of financial constraint.
Ikea: A Unique Case in a Turbulent Market
While Ikea faces similar challenges regarding store traffic,the company has managed to mitigate losses through strategic adjustments.
despite a 5% drop in overall turnover, Ikea stabilized its sales in France in 2024, with store attendance increasing by 6%.
Aggressive Pricing Strategy
One key element of Ikea’s strategy is a significant reduction in prices.
In 2024, the prices of over 2,000 items were lowered, with an average decrease of 18%.
Ikea is willing to reduce its profit margins to maintain sales volume and restore its image of accessible furniture
, which had been affected by previous price increases.
This approach contrasts with that of some competitors, who have passed increased logistics and supply costs onto consumers, potentially deterring customers.
Embracing Customization and Enhanced Services
Ikea is also distinguishing itself by moving beyond
