Business & Finance

Ikea announces price cuts in Europe amid falling revenues

The furniture retailer is investing €1.2 billion to reduce prices on popular products as cost-of-living pressures squeeze consumers.

Updated Sep 1, 2026 · 12:18 UTC1 reports

The short version

Ikea is spending €1.2 billion (£1 billion) to cut prices by up to 28% on popular products in Europe.
The price reductions, funded by supply chain savings, are aimed at reversing a two-year decline in revenue caused by inflation and rising living costs.
Ikea is also expanding its footprint with smaller downtown stores and a dedicated second-hand online marketplace.

Ikea is cutting prices by up to 28% on popular items in Europe, including the Billy bookcase and Kallax shelving units.[BBC News]
The company is spending €1.2 billion (£1 billion) to fund these reductions, which are supported by savings across its supply chain.[BBC News]
Ingka, the franchisee that operates most of Ikea's European stores, stated that the price drops are a long-term strategy rather than a short-term promotional campaign, even if they result in lower margins.[BBC News]
Ikea has experienced declining revenues over the past two years due to rising cost-of-living pressures affecting consumer spending on furniture.[BBC News]
To reach more customers, Ikea is opening smaller, centrally located stores in cities like London and Brighton, and launched its own online second-hand marketplace in 2024.[BBC News]