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IKEA UK reports strong sales performance in fy20, accelerating plans to become more affordable, accessible and sustainable

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IKEA: pandemic strategies paying off
IKEA: pandemic strategies paying off
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IKEA sees sales hit £1.9bn in the UK as it looks to be more sustainable and affordable

Home furnishings retailer IKEA has announced total sales of £1.90 billion in the UK for the financial year ending 31 August 2020 (FY20).

 

With stores closed for up to three months of the financial year, IKEA UK saw a decline in sales of -10.2% on the previous year, but in a year when life at home became more important than ever, online sales surged +31% compared to the previous year and now represents 27% of its total sales in the UK (compared to 19% in the previous year).

 

Despite operating in particularly challenging circumstances, the pandemic has also proven to be a catalyst for positive change for the retailer. IKEA’s response to the pandemic resulted in the rapid acceleration of its transformation plans, enabling it to meet its customers in more ways than ever before.

 

To help cater to these new shopping behaviours, digital initiatives were introduced at pace, including launching Click and Collect across all stores, using stores as local fulfilment and distribution centres, to increase capacity and reduce delivery lead times, and remote kitchen, wardrobe and living room storage planning appointments, ensuring customers could still access IKEA’s home furnishing expertise.

 

It also introduced ‘Click and Deliver’ to 4,000 DPD drop off points nationwide and a tiered pricing structure for orders based on size and speed of delivery, starting from £2.00.

 

Peter Jelkeby, Country Retail Manager, IKEA UK and Ireland comments: “2020 was the year that changed everything – from the way we live our daily lives, to the way we do business. Overall, I am proud of our performance and the way in which we’ve continued to develop and adapt our business, to better meet our customers’ needs.”

 

He continues: “In a year when life at home was never more important, we accelerated our transformation plans by fast-tracking the rollout of Click and Collect across all stores and introducing ‘Click and Deliver’ to DPD drop-off points. Changes made over the past year will be vital for securing the future success of our business, as we continue our ambition to create a better everyday life for the many people and build back better by becoming truly people and planet positive.

 

Jelkeby conclude: “Throughout the pandemic, it was vitally important for us to take care of our co-workers and communities at a time when it was needed most. The health and wellbeing of our co-workers and ensuring they felt supported, both emotionally and financially, remains our highest priority. Through our emergency community support approach, we unleashed a huge breadth of kind acts and care into local communities - made possible by the passion and commitment of our co-workers.”

 

Looking after customers and co-workers

IKEA also prioritised the health and wellbeing of its customers and co-workers above all else; reopening with enhanced safety measures which included limited customer numbers, a staggered entry system to enable social distancing, Social Distancing Wardens and enhanced cleaning routines.

 

Despite stores being closed for up to three months of the financial year, IKEA offered financial stability to all co-workers by continuing to pay 100% of salaries and, knowing the crisis had unforeseen impacts, launched a ‘Covid-19 Emergency Fund’ available to co-workers experiencing additional hardship as a result of the pandemic through non-repayable grants.

 

The retailer also invested in formalised programmes to support its co-workers’ mental health and appointed the RetailTrust, a not-for-profit organisation, as their official provider of wellbeing services. In addition, all co-workers across the UK are encouraged to take an extra day off this year, called a “me-day”, as the business continues to support their overall health and wellbeing.

 

Supporting the most vulnerable

With the backing of IKEA UK’s global parent company, Ingka Group, the retailer prioritised the needs of high-risk groups and those leading relief efforts, supporting over 67,500 people by contributing £1.3m worth of products to community efforts and charity partnerships, to help those most impacted by the COVID-19 pandemic.

 

This included supporting frontline efforts against the pandemic itself through the transformation of car parks in Wembley and Gateshead into drive through test centres so NHS staff could be tested for the virus, and creating and furnishing 154 spaces for healthcare rest rooms, childcare homes and temporary apartments.

 

IKEA also supported the most vulnerable in the community through a range of partnerships, including its national charity partner Barnardo’s, as well as The Red Cross, Alzheimer’s Society and Breaking Barriers. Over 130,000 products were donated to various causes, from beds and mattresses, to toys and food.

 

Sustainability a priority

Despite the disruption caused by the pandemic, IKEA remained committed to fighting the climate emergency and continued its efforts to becoming climate positive and fully circular by 2030. As a business, 100% of IKEA’s electricity came from renewable sources.

 

Making healthy and sustainable living affordable and accessible for its customers remained a key priority for the business. Sales of IKEA’s People and Planet Positive products were particularly strong, with 63 million sold, representing 30% of the total volume of products sold over the course of the year.

 

Looking forward to 2021, the retailer will continue this commitment with initiatives such as the removal of all non-rechargeable alkaline batteries from its home furnishing range, alongside the launch of its ‘Buy Back’ service, which will see IKEA stores offer to buy back unwanted IKEA furniture from customers and resell them as secondhand items.

 

closes: “We have kick-started 2021 more committed than ever to our transformation plans and continue our journey towards a more affordable, convenient and people and planet positive IKEA. Having learnt an incredible amount about our customers, our abilities and our adaptability, we will work hard to take the customer experience to a new level and have plans to invest where it matters most.”

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