In FY25 IKEA UK continued long-term accessibility journey, and returned to growth in final quarter
Amid limited UK economic growth, high interest rates and rising living costs - key growth barriers for the home furnishing market - IKEA UK maintained a stable market share.
IKEA continued its long-term journey to make its products more affordable for customers and strengthen its omni-channel offering.
Following a £117 million investment in price reductions during FY24, the company accelerated its expansion in FY25 with four new store openings in the final quarter and the addition of 101 'Collect Near You' points.These initiatives contributed to a 4% increase in sales volumes year-on-year.
“In a challenging environment marked by economic and trade uncertainties, rising cost-of-living pressures and weakened consumer confidence, I am proud that we continued our programme of strategic investments in the UK to build a more affordable, accessible and sustainable IKEA. We saw these investments begin to pay off in the final months of FY25 and now into FY26, which gives us confidence for the year ahead.”
Strengthening our omni-channel offering
IKEA made strategic investments to give customers the flexibility to shop with the retailer however is most convenient to them.
IKEA expanded its UK footprint, opening new formats designed for customer convenience. These included opening two new city centre stores, on London’s iconic Oxford Street and in Brighton’s Churchill Square Shopping Centre. IKEA Oxford Street, in one of the world’s most famous shopping destinations, generated 1.34m visits in its first four months.
IKEA also opened two of three new-format small stores in FY25, in Harlow and Norwich. Located within busy retail parks, this world-first format is designed to offer a simpler, faster shopping experience for customers. The third small store opened in Chester last week, as IKEA’s strategic expansion continues into FY26.
Two new Plan and Order Points were opened in Hull and York in FY25. As the retailer’s smallest format, Plan and Order Points are focused on planning, designing and ordering kitchens and bespoke storage solutions, as well as offering collections for online orders.
“Our network of stores is hugely important, not only as a point of purchase but as a source of inspiration for customers, with our famous showrooms tailor-made for local communities. Last year was a landmark year for expansion, with four new stores and two Plan and Order Points, and we’re seeing an exceptional response to these units. As well as strong footfall, there has been an increase to online sales in the new areas we’ve launched in, showing a clear desire for our brand and range.”
Online sales grew by 2% in FY25, accounting for 43% of total sales compared with 41% in FY24. Enhanced delivery capabilities through IKEA’s distribution centre in Dartford and in-store fulfilment, the expansion of collection points for online orders, and investments in lowering delivery prices for IKEA Family members helped drive this increase in online sales.
“While our strategic investments in affordability and accessibility are delivering strong results, we’re trading in a difficult economic environment. Simple, targeted support from Government, like easing the burden of business rates would make a tangible difference, encouraging retailers to continue investing, saving existing jobs and creating new ones, and serving communities across the country.”
Our innovative range remains key to success
IKEA continues to bring new and innovative products to market that are functional, quality, sustainable, affordable and with good form, in line with the retailer’s principles of Democratic Design.
In FY25, Kitchens and Bedrooms were key the two commercial focuses, both of which recorded solid growth (+1.8% and 2.7% respectively).
Some of the retailer’s newest products were among its best performers in FY25, including:
- The PILSPINNARE soft cotton pillow, engineered to maximise comfort for those who sleep on their back or side.
- The HAGERNÄS table and chairs; a compact, solid-wood table and chairs with traditional styling that gives it a sturdy, upscale look at a budget-friendly price.
- The new STOCKHOLM collection that blends durability and craftsmanship to create beautiful and timeless furniture.
“Our range is at the heart of everything we do. Our customers trust us to provide well-designed, high-quality and affordable home furnishings – we take that mission seriously and consistently deliver.”
