Irish customers spending €556,000 a day in Ikea

Ikea has breached the €200 million mark in sales in Ireland after its 10th year in operation here as it puts expansion of its physical network on hold.

The home retailer posted revenues of €203 million for the financial year ending August 31st, 12 per cent up on the previous year.

Although the retailer has yet to disclose profit for this financial year, it is expected to rise compared to last year – when it recorded profit before tax of €2.5 million – given that that’s when investment in its retail estate and online offering was concentrated.

Nevertheless, the €22 million rise in revenue is viewed as an impressive result by the company, which has put its physical expansion plans on hold to focus on "becoming more accessible" by selling more of its wares online, according to Peter Jelkeby, Ikea UK and Ireland country manager.

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Ikea had previously been reported to be interested in opening large outlets, similar to its Ballymun facility, in both Cork and south Dublin.

“We took a conscious decision to go with digital,” Mr Jelkeby said. “We’re initiating plans to transform over a three-year period and we need to start to be more innovative,” he said, adding that the company is evaluating the performance of its main Ballymun store and its order and collection outlet in Carrickmines, Co Dublin.

Market share

Ikea now holds an 11.9 per cent market share, up from 8.7 per cent this time last year, the eighth consecutive year of growth at the retailer. The company’s kitchen range in particular is “taking off”, Mr Jelkeby said.

Online, Ikea sales increased by 86 per cent compared to the previous year with online sales account for 16 per cent of the total, or €32 million. During the year, the website received 18 million visits, up 1 million on the previous year.

Since it opened in July 2009, more than 30 million visits have been made to Ikea’s outlets in the Republic. This year, the most popular product those customers bought instore was the white Ribba picture frame. Online, the most popular product was the Hemnes day bed.

“We know a seamless online journey is important to our customers, and our ambition is that our customers will be able to search, find and buy an Ikea product online within five minutes,” Mr Jelkeby said.

Brexit uncertainty

Asked whether the company has seen an impact from Brexit uncertainty over the past few years, Mr Jelkeby noted that during Ikea’s eight years of growth here, “it’s been a challenging time in retail” but that the company has yet to see an effect from Brexit. He added that Ikea is perhaps insulated slightly from economic trends given that they “are about affordability”.

Ikea employs 700 staff in the Republic and is unlikely to add significantly to that given its push online, Mr Jelkeby said.

Ikea is ultimately owned by Ingka Holding based in the Netherlands and globally reported sales of €41.3 billion in its 2019 financial year.