IKEA annual sales fell 5% after the Swedish budget homeware retailer cut prices in a bid to attract more shoppers and maintain its share of a shrinking home furniture market, but it expects a recovery next year.

Ingka Group, which owns most IKEA stores globally, reported 39.6 billion euros ($43.3 billion) in sales for its financial year ended Aug. 31.

“In all our markets we experienced a slowdown of the economy and a slowdown of the home furnishing industry, almost simultaneously,” said Jesper Brodin, CEO of Ingka Group. “We never experienced anything like that since 2008, to be honest.”

After seeing a decline in store visits and sold quantities, IKEA decided to cut prices, which boosted footfall and the amount of products sold, Brodin said.

Ingka Group said it invested more than 2.1 billion euros in price cuts across its markets, and its share of the global home furnishing market stayed steady at 5.7%.

IKEA has benefited from households trading down as a global property slowdown hurt confidence, said Tolga Oncu, retail manager at Ingka Group.

For 2025, IKEA expects a boost to sales as lower interest rates drive more people to move house, which usually prompts buying of beds, sofas, and bookcases.

Store visits increased by 3.3% to 727 million this year, slower than the 7.4% growth seen in 2023 and new openings fell to 41, from 60. Ingka plans 58 new locations worldwide in its 2025 financial year.
Its share of sales made online increased to 28%, up from 26% in 2023.

This holiday season, like last year, Oncu expects people to spend more time hosting at home rather than going out, with budgets still constrained by inflation.

Inter IKEA Group, which owns the IKEA brand and manufactures the products, reported annual sales of 45.1 billion euros ($49.3 billion) across all franchisees, of which Ingka Group is the biggest. That was down 5.3% compared to 2023, largely due to price cuts as the cost of raw materials like wood fell.

Inter IKEA CEO Jon Abrahamsson Ring said more price reductions were planned for its 2025 financial year, which started on Sept. 1, but likely not as significant.