IKEA built its empire on the promise that stylish furniture can be cheap, but years into the cost-of-living crisis, its latest price cut suggests shoppers want it even cheaper.
The Swedish furniture giant said on Tuesday it will invest about $1.4 billion (€1.2 billion) to lower prices across Europe, including cuts averaging 15% to 25% on items such as home furnishings, kitchen products and storage bins. The company cited higher living costs squeezing consumers and said it’s willing to sacrifice some margin to help.
“It’s about making IKEA more affordable when people need it most, even if it means accepting a lower margin,” IKEA’s largest franchisee Ingka Group CEO Juvencio Maeztu said in the press release. He also said, “keeping prices low is our long-term commitment.”
The cuts follow years of steep price growth. Euro-area inflation hit a record 9.2% in 2022, and furniture climbed alongside it: Eurostat’s harmonized price index for furniture and furnishings across the EU now sits about 24% above its 2015 level, with far sharper run-ups in markets like Estonia (up roughly 58%) and the Baltics. IKEA felt the same squeeze on raw materials and logistics—it took the rare step of raising prices after COVID before reversing course, and has since invested between €2 billion and €3 billion to bring prices down by about 10% since 2023.
