Swedish company IKEA enjoys a global consumer rebound
IKEA, the world's biggest furniture retailer, is seeing evidence that consumer spending is picking up, even in recession-hit southern Europe, 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, said yesterday that some of the strongest growth was in China, while North America continued to perform well. Europe, where IKEA derives almost 70pc 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 flat-pack furniture giant's biggest markets are Germany, the US and France.
IKEA's sales rose 5.9pc to €28.7bn in the 12-month period to the end of August, an acceleration from the 3.2pc growth it reported for the previous year.
Sales in comparable stores during the year grew 3.6pc.
IKEA has a target to double sales to around €50bn by 2020 through combined growth in sales at existing stores and by launching in new markets, but did not comment on its progress towards that goal. Founded in a shed in 1943 by Ingvar Kamprad to sell pens, wallets, watches and jewellery, and whose stores now sell everything from candles to fitted kitchens, it 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 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 Belgium - its sixth market - and plans to launch in other countries in the next year.
IKEA is also facing competition in home furnishings from fashion chains such as Zara, Next and H&M.
In response to a shift in shopping habits to smaller local stores and the internet, IKEA opened its first city centre store earlier this year in Germany.