Ikea has posted strong sales growth and launched a campaign encouraging consumers to do up their houses rather than sell them as the property boom threatens to run out of steam.
Retail Week can exclusively reveal that the Swedish furniture retailer reinvigorated stalling UK sales growth in the year to August 31, recording a seven per cent uplift to about£1.2 billion.
The rate of growth was more than double the 3 per cent recorded the previous year, which was the second-worst year in Ikea’s two decades in the UK.
In a week when the Government took the unprecedented step of guaranteeing savers’ accounts at mortgage lender Northern Rock, Ikea thinks that its new marketing strategy – which includes “Not for sale” signs that consumers can post outside their homes – is in tune with chastened times.
UK managing director Peter Høgsted said: “Our mission is to communicate that, instead of being so occupied by making money from your house, you should think about how you can make your house into your home. It is fitting, as more people cannot afford to move.”
The “Home is the most important place in the world” campaign – the retailer’s biggest to date – launched today on billboards, TV, cinema, radio and online. The retailer has established a web site called Notgoinganywhere.co.uk as a forum for debate.
Høgsted added: “We are launching a movement where people can embrace their home and say we are not moving.”
Ikea’s improved sales performance last year came as it nears the end of a five-year investment period. A total of£500 million has been spent to tackle congestion in shops and almost double store numbers to 19 by the end of next year.
Høgsted declined to provide like-for-like figures, but said that “profits are lower, mainly due to the effect of the investments”.
He wants the retailer’s transactional web site, which is available to 65 per cent of UK households, to generate sales of£80 million.
Høgsted was bullish about prospects, predicting an upturn from next year. He said: “Home furnishing has been going through a couple of challenging years – we have to fight a little bit harder for turnover.”
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