Ikea UK has revealed a slump in sales for the past year as under-pressure shoppers held off buying bigger-ticket items.
The UK arm of the Swedish homeware giant said the fall was also partly driven by price reductions to keep attracting customers hit hard by the higher cost of living.
The company revealed that retail sales dropped by 6.8% to £2.3 billion for the year to August, compared with the previous financial year.
Ikea linked the drop to a “strategic decision to prioritise affordability” as it invested more than £117 million into lowering prices over the year.
Peter Jelkeby, chief executive and chief sustainability officer of Ikea UK, said: “In a year of economic uncertainty, our priority was clear: stand with our customers.
“In spite of our reduced turnover, continuing to lower prices remains our long-term priority.”
The retailer, which is owned by parent group Ingka, said more than 3,000 products, representing about a third of its range, were reduced in price.
It said there was an “uptick” in demand as the year progressed, supported by more price reductions, which helped improve sales in categories such as kitchens, bedrooms and storage.
Ikea UK said it is also continuing to make progress on its expansion programme, with two new city centre stores: on Oxford Street in London, and in central Brighton, set to open next year.
Mr Jelkeby added: “We continue to dedicate our energy to our UK expansion plans and investing heavily to become more accessible.
“To complement our existing stores, we are laser-focused on continuing to innovate to reach more customers, with a network of new, smaller stores that offer different experiences, as well as new services that meet all of our customers’ needs – no matter where they live.”
On Thursday, Ingka revealed that the global Ikea group saw retail sales drop by 5% to 39.6 billion euros (£33.2 billion) for the year.
