Furniture giant Ikea’s group net profits jumped 8% to €3.2bn in the year to August 31 as the retailer benefitted from higher sales volumes and a focus on cost.

IKEA group sales increased 9.5%, or 7.1% when adjusted for local currencies, to €27bn as it continued lowering process and improved product quality, Ikea said. The retailer lowered prices by 0.8% on average, despite high raw material prices, rising transport costs and inflation.

Margins fell from 44.2% to 41.8%

Ikea group president and chief executive Mikael Ohlsson said: “The Ikea business idea is more relevant than ever. People around the world are more value conscious and appreciate beautifully designed and functional home furnishing solutions at affordable prices.”

He added that the retailer had “managed to grow in most markets” in the period, particularly in China, Russia and Poland, “closely followed by the US and Germany”.

Retail Week revealed in November that Ikea UK and Ireland’s like-for-likes surged 6.3% in the period as it invested £30m in the shopper experience.

Ohlsson added: “World economic conditions will remain tough in many markets. However, we have an optimistic view and have just launched our direction Growing Ikea Together 2020. It is an ambitious growth strategy, aiming at doubling our sales by 2020. Ikea is still small in most markets, and not even existing in others – we’re just at the beginning.”

The retailer said €1.3bn was invested in new and existing stores. It also invested in “new and better services”, and ecommerce. Ikea also made “considerable investments in renewable energy”. Ikea produces renewable energy equivalent to a third of its total energy consumption.

Ohlsson said: “We believe in sustainable growth, by expanding from our own resources, making long term decisions and growing within the limits of the planet.”

At group level, Ikea opened 11 new stores in nine countries and hired 8,000 new members of staff.

More than 690 million people visited Ikea stores in the period. The retailer recorded more than 1 billion visits to its websites, up 21.8%

Ikea has around 300 stores in 26 countries.

Ikea will open its next store in the UK in Reading. UK and Ireland acting country manager Carole Reddish said the online business is going from strength to strength, as well as the retailer’s in-store revamps of the Markethall areas.

She added that last week was “tough” because heavy snow hit footfall, but she added the severe weather conditions did not affect deliveries.

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