Ikea Korea says won’t raise prices in next 12 months

Ikea Korea will not raise product prices in the next 12 months, sticking to its policy of offering quality products at low prices, the Swedish furniture giant’s Korean unit said Thursday.

Holding an online press conference, the firm also revealed that in the fiscal year ending this month, it has seen a 23 percent jump in consumer visits to both online and offline stores but sales growth stood at a disappointing 3.4 percent. In the previous fiscal year, the company had reported about 30 percent gain in sales.

“Ikea Korea recorded 683.6 billion won ($584.2 million) in sales, had a total of 70 million visitors, expanded sustainable products to 36 percent of all products, and achieved 25 percent EV truck conversion for deliveries,” Ikea Korea’s country retail manager, Fredrik Johansson, said at an annual media conference held virtually.

As for the slow growth in sales in the current fiscal year, Johansson said its stocks were affected by the pandemic, and also, that it had lowered product prices twice in the year.

“When the COVID-19 hit last year, factories (outside of Korea) had closed down based on local regulations, and there have been a huge container imbalance, especially from China and Europe,” the executive said.

“Still, we have had 23 percent increase of total visitations. I think that is amazing.”

Despite the slowdown, Johansson vowed not to raise prices of the products for next year, stressing its goal of providing better quality products at lower prices.

“We will commit to reach many Koreans and those with thin wallets,” he said.

Looking forward, the company will launch a new brand campaign “Life at Home Movement,” under which it will be hosting a wide range of activities to promote a broader concept of home. It also aims to provide furnishing products and solutions at lower prices by strengthening its “omnichannel” solutions at all online, offline touchpoints, it said.

“For the successful transformation of the omnichannel business, we will introduce an upgraded shopping experience and more affordable Ikea products and services while striving to inspire many people to live a healthy and sustainable life,” Johansson said.

Highlighting that Ikea Korea is here for the long run, the furniture maker also hinted that it is planning to increase penetration in different provinces without any physical stores, such as Chungcheong Province.

By Jo He-rim (herim@heraldcorp.com)