Furniture dealer
Corona and online competition are putting Ikea under pressure
Online competitors are putting pressure on the furniture company Ikea. Photo: Patrick Pleul / dpa-Zentralbild / dpa
© dpa-infocom GmbH
Despite Corona, Ikea remains the market leader in the German furniture industry. But the Swedes with the big blue markets are agile attackers on their heels. The elk hunt is decided online.
Germany’s largest furniture retailer Ikea is under pressure from new online competitors after almost two years of the corona crisis.
According to its own information, the company lost sales in its most important single market worldwide in the past financial year 2021 (until August 30) and also surrendered market share for the first time in a long time.
Ikea for 2G
Germany boss Denis Balslev warned of renewed business closings in the pandemic and promoted access for those who have been vaccinated and those who have recovered. “2G is much better than closing again,” he said. Ikea is prepared to enforce the rules.
In the year under review, the 54 blue furniture stores of the brand from Sweden were closed for five months, which, despite higher individual receipts, led to a drop in stationary sales of around a quarter. At 5.305 billion euros, total sales fell 3.2 percent short of the record year 2020. The more than doubled online sales (plus 102.9 percent) could not fully compensate for the income gaps from the stationary business. The market share fell to 8.09 percent, as Balslev reported.
Battle for market share
Ikea sees aspiring mattress mail-order companies as challengers, as do Otto and Amazon, who have expanded their furnishing offerings. However, Ikea is not willing to permanently surrender market share, explained the Germany boss. The transformation into a retailer with all channels was mastered much faster than expected. The top dog was able to increase its online share from 16.2 percent to 34.3 percent within one year. The new planning studios in Berlin also contributed to this. Further investments, especially in delivery, are due.
Balslev also announced price increases. Problems caused the globally disrupted supply chains, higher transport costs and the high raw material prices, for example for wood, metal and foam. The manager said the company is currently still watching the competition and will stick to the Ikea goal of affordability. In the kitchen segment, Ikea is able to deliver furniture, but like its competitors, it has great difficulties with built-in electrical appliances, the so-called white goods. Ikea once again pointed out that it had not used any government aid for its almost 20,000 employees. They paid for them in full all the time.