IKEA sees global consumer rebound as sales growth doubles
IKEA Group, the world's biggest furniture retailer, is seeing evidence that consumer spending is picking up, as the pace of growth in annual sales nearly doubled compared with the previous year.
The Swedish company, seen as a reliable gauge of global consumption because it has more than 300 stores in 26 countries and regions, said on Tuesday some of the strongest growth was in China, while North America continued to perform well.
Europe, where IKEA derives almost 70 percent of its sales, was still burdened by a challenging economic situation, but it is improving slightly.
"We continue to see positive signs in consumer spending and it's a great joy to report growth in almost all our markets, not least in the challenging markets in southern Europe," IKEA Chief Executive Peter Agnefjall said.
The Swedish furniture giant's biggest markets are Germany, the US and France.
IKEA's sales rose 5.9 percent to 28.7 billion euros ($37.0 billion) in the 12-month period ended August 31, an acceleration from the 3.2 percent growth it reported for the previous year. Sales in comparable stores during the year grew 3.6 percent.
IKEA has a target to double sales to around 50 billion euros by 2020 through combined growth in sales at existing stores and by launching in new markets, but did not comment on its progress toward that goal.
IKEA said e-commerce showed growth, while the number of store visitors also increased, without giving figures.
IKEA was initially slow to embrace online retail but is now investing more as rivals compete for a chunk of its business.
Online furniture retailer Home24, a German-based start-up, has set its sights on challenging IKEA's dominance. It is expanding to its sixth market Belgium and plans to launch in other countries and regions in 2015.
IKEA is also facing competition in home furnishings from fashion chains such as Zara, Next and Hennes & Mauritz.
In response to a shift in shopping habits to smaller local stores and the Internet, IKEA opened its first city center store earlier this year in Germany.
Source: Global times