Ikea wants to double its kitchen sales in Belgium
Ikea Belgium aims to double its kitchen sales in three years, the Belgian division of the Swedish furniture brand said on Thursday, on the sidelines of the presentation of its annual financial results. Its operating revenue accelerated by 2.8% over the staggered 2021-2022 financial year (closed on August 31), to reach a new record of 1.037 billion euros. The net profit is also positive, even if the company does not wish to say more. Ikea is pleased with this performance, especially in the current difficult economic environment (“Russian mountains“) with consumer confidence at half mast in the wake of the war in Ukraine, very high energy prices and inflation. She explains this in particular by “ongoing investments for a hybrid, online and offline shopping experienceShe cites, for example, services such as “Click & Collect”, where the online order awaits the customer in the store, and “Scan&Go” (60,000 transactions since May), through which customers scan items with their smartphone, which reduces checkout time.
Thanks to this, it managed to attract 11.8 million in-store visitors and 75.8 million online visitors.
Behind the increase in sales, due to rising prices, however, hides a small decline in the volume of items sold. A “slight decrease” according to André Schmidtgall, the general manager of Ikea Belgium. But since September, the figures have been on the rise again. And the brand hopes to be able to lower some selling prices again.
Supply chain issues, however, had a negative impact last year. “In some product categories, there was much less stock than requested“, explains the German boss. Ikea has looked for alternatives in such situations but says it has been confronted with “the most difficult situation ever encountered“.”Today we are not yet at the level from which we started, but the situation is already much better in terms of availability.“, assures the director, who expects six to 12 months for a return to normal.
The share of online sales, meanwhile, rose to 16.5% of sales, compared to 5% in the pre-Covid period. Sales through the mobile app and website had accounted for more than a fifth of revenue in the previous fiscal year (2020-2021) but then there were store closures due to the coronavirus pandemic.
Between the beginning of September 2021 and the end of August, Ikea sold some 26,500 kitchens. The brand aims to be able to double its turnover in this area in three years. “We are betting on sales of around 50,000 unitsconfirms André Schmidtgall. According to him, the prices offered are 60% cheaper than the average prices on the market. Each month, approximately 11,000 kitchen plans are produced.
The company has also experimented with drones in the Ghent store to monitor stock levels on the shelves, while a test of automated guided logistics vehicles – when the store doors are closed – is underway in Hasselt. It is also considering testing its 24/7 Click & Collect service.
After having tested electronic price tags in Ghent, this system should probably be extended worldwide, adds André Schmidtgall.
Economic forecasts”worrying“
The Belgian division of the Swedish brand also wants to quintuple its investments in its stores during the current financial year, by the end of August 2023 therefore, to 22 million euros. And this despite economic discounts”worrying“. Store expansions are underway or forthcoming, but there are no plans to open a new location at this time, either in a large (which requires space) or smaller version. , as was the case a few years ago in Leuven with an ephemeral urban store.
Last year, Ikea injected 4.8 million euros into its stores in Ghent, Wilrijk, Zaventem, Hasselt, Anderlecht, Liège, Mons and Arlon.
At the end of August, the company employed 4,480 employees, a number on the rise.
It should also be noted that Ikea Belgium reduced its climate footprint by 30.5% last year, that more than 600,000 products received a second life via the space dedicated to them in stores and that 220,000 others repackaged for resale.
At the global level, the furniture giant announced Thursday a 6% increase in its annual turnover, during a financial year described as “difficult” due to inflation and the cessation of its activities. in Russia, where the group has already thanked 10,000 employees. The some 470 stores and points of sale of the multinational achieved sales of 44.6 billion euros, announced Inter Ikea, the holding company of the group based in the Netherlands.