The move comes after two years of declining revenue linked to rising living costs and weaker consumer confidence. Ingka Group, which operates most IKEA stores in Europe, said the initiative is intended as a long-term approach rather than a short-term promotion, even if it affects profit margins.
Price Reductions Target Affordability Across European Markets
IKEA said it will achieve the lower prices through savings across its supply chain, including areas such as packaging costs. Juvencio Maeztu, CEO of Ingka Group, said the company wants to make IKEA more affordable at a time when many consumers are facing financial pressure. “The cost of living is increasing and it’s getting tougher and tougher for many people,” Maeztu said.
The price changes vary by market. In the United Kingdom, the Kallax shelving unit has been reduced from £60 to £49, while the Billy bookcase, one of IKEA’s best-known low-cost products, has fallen by £10 to £25.
According to figures from the European Commission, consumer confidence in Europe is currently at its lowest level in almost three years, driven by concerns about inflation and living costs. IKEA’s price strategy follows similar moves from other retailers attempting to respond to changing consumer behavior.
Ingka Group reported that its net revenue declined from €4.8bn (US$5.5bn) in 2024 to €4.5bn (US$5.2bn) in 2025, while annual profit rose from €0.8bn (US$927.5m) to €1.4bn (US$1.62bn) during the same period. The company has continued to focus on making its products more accessible while managing financial pressures linked to lower prices.
The retailer is also expanding its presence through smaller stores in central locations, including Oxford Street in London and Churchill Square in Brighton. In 2024, IKEA launched its own second-hand online marketplace, offering customers access to used IKEA products alongside existing platforms such as eBay and Facebook Marketplace.
Ingka Expands Investment in Recycling and Circular Economy Projects
Alongside its pricing measures, Ingka Group has committed investment to sustainability projects through Ingka Investments, the company’s investment arm. In January 2025, Ingka Investments announced plans to invest about US$1bn in businesses developing recycling infrastructure.
The company said the investment would support the transition toward a circular economy by helping recycle end-of-life products into secondary raw materials. According to Ingka Investments, less than 20% of waste is recycled globally, while the global economy consumes more resources than the Earth can regenerate.
Ingka Investments said its Circular Investments portfolio has focused on areas including plastics, mattresses, textiles, wood and food waste. Since 2017, the company estimates that portfolio businesses have recycled around 2.7 million tonnes of materials and avoided more than 9.4 million tonnes of carbon dioxide equivalent emissions.
Examples include RetourMatras, which recycles mattresses into materials used in new foam products, and Morssinkhof Rymoplast, a plastic recycling company whose capacity reached 515,000 tonnes per year after investment support.
Peter van der Poel, Managing Director of Ingka Investments, said the company aims to support businesses that prevent waste and increase the supply of recycled materials. He also called for stronger policies encouraging recycling and the use of recycled materials.
Ingka Group is also examining investments outside Europe. The company said it plans to invest €70m (US$81.1m) in Asia and North America to help address inflationary and currency pressures, although it has not provided details on whether those funds will lead to price reductions.
