Ikea’s sales fell for the first time in 4 years after it joined the price-slashing wave

Home Swede Home… After some steep discounting last year, build-it-yourself-furniture icon Ikea may’ve found itself stuck between a Rocksjön and an Älskvärd place. Sales at the world’s largest furniture retailer this year fell 5% to $49B — its first revenue drop since 2020 — after it slashed prices on thousands of items by an average of 10%. Ikea said the sales dip could hurt its profit, which it’ll report next month. And though the dollar value of sales was down, transactions were up:

• Meatballin’: Ikea execs said discounting drove 21% more visits to its stores and website and boosted the # of items it sold by 7%. The company also slung 1.2B meatballs on the year, making it one of the world’s biggest restaurant chains.

• Big bag: Before its discounting wave, Ikea had assembled huge price bumps on some of its products. The cost of a loveseat rose 66% between 2021 and the end of 2022, while a dining-table-and-chairs set (shout out, Jokkmokk) surged 80%.

Not just Ikea… A wave of retailer discounting appears to be boosting demand. Target, which slashed prices on thousands of items this summer, said its comparable sales last quarter rose for the first time in a year. Walmart, which has discounted 7K+ items, reported 5% quarterly revenue growth. JCPenney yanked prices down last year and saw store traffic more than double. And Costco said that lowering the price of its Kirkland chicken led to a 21% sales bump.