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Ikea’s focus on its customers brings outstanding results for 2012

Ikea’s focus on its customers brings outstanding results for 2012

IKEA, the world’s leading home furnishing company, today announces its total sales of £1.23 billion[1] in the UK for the financial year ending August 31st 2012, representing a total increase of 6.3% in like-for-like sales and the biggest growth seen in six years. IKEA’s position as leader in the market was also strengthened with market share growing by 0.4% to 6.8%[2], despite a 2.2%[3] drop in total sales in the home furnishing sector.

Online like-for-like sales increased by 24.9%, achieved after a further 1500 products were made available to buy online following consumer demand and the continued global website developments to enhance the online shopping experience.

IKEA experienced great success in the bedrooms product category, with an increase in like-for-like sales of 16.7%, after a £2.5 million investment to redesign the bedroom showrooms in all UK stores to better reflect the life at home of local consumers. A £15 million investment to reduce the price of the most popular bedroom storage range, ‘PAX’, contributed to the increase as more customers found the range affordable to buy for their homes. IKEA increased its bedroom category market share by 0.8% and continues to lead the category with a total share of 8.3%[4].

Following feedback from customers, new in-store ‘Pick and Delivery’ and ‘Furniture Take Back’ services were launched, which also contributed to the growth.

Despite the annual Retail Prices Index inflation rate standing at 2.9%[5] in August 2012, IKEA reduced prices by a total of 0.6% of total turnover, continuing a long tradition of making home furnishings more affordable to consumers, particularly in a period when family’s disposable income budgets were decreasing.

The successful results come after IKEA was named ‘The Nation’s Favourite Retailer’ in the Verdict Consumer Satisfaction Awards in April 2012.

Improving the customer shopping experience
Throughout the year, a total of £30 million was invested in improving the shopping experience for customers, including the bedroom showroom redesigns. Other highlights include:

• £4.7 million to lower the cost of in-store home delivery: Now starting from just £15, the in-store home delivery service is more accessible to customers than ever before

• £1 million invested in a new Market Hall design at the IKEA Warrington store: a potential solution for all IKEA stores aimed at being more inspirational and easier to locate products for customers

• £7.5million to increase the size of the IKEA Birmingham store: extended by 2500m² to facilitate more practical ideas and solutions to inspire customers

• £5.3 million investment for an external warehouse at the IKEA Edinburgh store: enabling more products to be available to take home on the same day

• Launch of a mobile friendly website and development of mobile apps: offering customers extra content, ideas and inspiration alongside the new 2013 IKEA catalogue

In addition, IKEA were granted planning consent from West Berkshire Council to build the 19th store in the UK, contributing to the local economy and jobs market while making IKEA more accessible to the people in West Berkshire and Reading.

Improving customer service
In financial year 2012 IKEA invested heavily in co-worker training, putting a focus on developing co-workers’ competence around understanding customers and their lives at home. Highlights include:

• Over 500 visits to consumers’ homes: to understand the challenges, needs and dreams of people living close to the IKEA stores

• £600k investment for co-workers in the Bedroom and Kitchen department: to improve knowledge of how the IKEA product range can enable customers to live a happier life at home, such as getting a better night’s sleep with the bedrooms range

• Continuation of the international ‘Back-Packer’ programme: 12 UK co-workers spent one year in development roles in other IKEA countries under an international programme. All have been promoted to new roles in the UK organisation

A Sustainable Future that meets customers’ expectations
In 2012, IKEA invested a total of £3.3million installing 38,000 solar PV panels on the roofs of its stores up and down the country, which supported the company’s ambition to become energy and resource independent by 2020.

IKEA has also pledged to help customers live a sustainable life at home by offering products and solutions that help them to save money by using less energy and water and reducing waste:

• In October, IKEA announced its intention to convert all lighting in its range to LED by 2016, which last for 20 years and save 85% energy

• IKEA also has ambitions to offer the most energy efficient home appliances on the market at the lowest price and will offer low price, functional and easy to use solutions for sorting and minimising waste and using less water at home

Looking ahead to 2013
Over the last 25 years, IKEA has developed a deep knowledge of consumers’ everyday lives at home alongside an understanding of what they think about and what they want from the brand, in order to be a more relevant retailer for their needs. Placed alongside the great value for money offer and willingness to invest in the UK, there are many opportunities to grow the business in the UK.

Carole Reddish, IKEA UK and Ireland Acting Country Manager, said, “In these challenging times it is very humbling that our efforts to give customers the best value for money home furnishings and inspiring solutions for their life at home has resulted in such strong growth.

Despite 2012 being a tough year for retail, we listened carefully to what our customers were telling us and invested heavily in improvements to the shopping experience. We know that we still have a lot of work ahead to ensure that all who shop with IKEA, both in-store and online, have a great shopping experience.

In the coming year we have an ambition to revitalise our brand identity in the UK. We will continue to show customers that we understand the challenges they face every day in their homes, connecting our value for money offer with their needs and their dreams. We will also provide thousands of practical ideas, solutions and points of inspiration that will give loyal customers something new on every visit and will encourage new customers to consider IKEA for the first time.”

For more information please contact:

IKEA Press Office

Lewis Marshall or Lois Blenkinsop
0845 225 7126