Ikea is responding to the ongoing cost-of-living crisis with bold moves to support its customers. In a bid to provide some financial relief, the Swedish furniture giant will introduce significant price cuts in its food courts and offer free meals for children.
These steps come as consumer confidence continues to waver, influenced by rising living costs and economic uncertainty.
The price reductions, which Ikea confirmed on Wednesday, apply to all of its restaurants globally. According to Tolga Öncü, Chief Operating Officer at Ikea Retail, the new pricing will see a 50% reduction in food costs on weekdays.
This measure is designed to help customers “stretch their budgets” during a period of increasing financial strain. However, while these food deals are expected to be temporary, Ikea has yet to clarify the exact timeline for these discounts and free meals.
Ikea’s Strategy to Keep Costs Down
In addition to cutting prices, Ikea plans to enhance its food offerings, adding new items to its menu. These include Asian-inspired dishes and the introduction of falafel, which will be available in both its restaurants and Swedish food markets.
This expansion is part of Ikea’s strategy to increase menu variety while maintaining its commitment to affordability.
This price-slashing move is a response to the wider financial pressures faced by customers, as more people are cautious with their spending. According to Öncü, many customers are holding on to their savings or reducing their discretionary spending, reflecting a decline in consumer confidence.
The price reductions are thus seen as a strategic response to keep Ikea attractive to cost-conscious shoppers, particularly families.
Ikea has long been recognised for its affordable food offerings, such as its famous Swedish meatballs and salmon fillets, which have made the food court a key part of the in-store experience. However, the company also faces mounting financial pressures.
Last year, efforts to keep prices low resulted in a 2.1 billion loss, highlighting the cost of balancing affordability with profit margins. Despite this, the company remains confident in its long-term goals, including its plan to open 58 new stores globally in fiscal year 2025.
Navigating Tariffs and Global Economic Pressures
While the cost-of-living crisis is a significant concern, the Swedish giant also faces external challenges such as high tariffs. The company’s global supply chain has been impacted by the trade policies put in place under the Trump administration, which included taxes on imports from key markets like China, Canada, and Mexico.
Ikea’s CEO, Jesper Brodin, noted that tariffs are “beyond our control” but acknowledged the impact they have on pricing, which can affect both the company’s affordability and consumer confidence.
Despite these challenges, Ikea’s efforts to maintain its position as a budget-friendly option are clear. With plans to continue expanding globally and offering attractive food deals, the company is navigating the turbulence of international trade and domestic economic pressures with a focus on keeping its brand relevant in difficult times.
According to Brodin, maintaining low prices has always been Ikea’s goal, and the current price cuts are just one example of how it is working to adapt in an ever-changing market.
