FY19 has been a successful year for the IKEA franchise system. As announced in September, retail sales grew by 6.5% compared to FY18. Total retail sales, which includes sales of IKEA products, food and services to IKEA customers, amounted to EUR 41.3 billion.
Retail sales growth means positive results for Inter IKEA Group, which includes the IKEA franchisor, range development, supply and certain industry activities. Inter IKEA Group reached total revenues of EUR 25.3 billion and a net result of EUR 1.5 billion in FY19.
This year Inter IKEA Group invested more than EUR 175 million to develop product, material and retail innovations to drive IKEA growth in the years ahead. “Inter IKEA Group financial results remained stable in FY19 despite pressure on the gross margin and investments in the IKEA range and customer experience,” says Inter IKEA Group CFO Martin van Dam.
One such investment is the IKEA Home smart range. During FY19 IKEA retailers launched several new connected products including remote controls, outlets, smart blinds and speakers. And engineers overhauled and improved the IKEA Home smart app. IKEA customers bought more than 5 million Home smart products in FY19.
Additional investments went to develop more sustainable products and materials. One example is a low-impact glue that can reduce the total IKEA climate footprint by up to 6%. Another is the expanding range of plant-based food options. Customers consumed more than 10 million veggie hotdogs in FY19, and in February 2020 select markets will launch a new no-meat protein “meat” ball.
To make IKEA products more accessible, Inter IKEA Group worked closely with franchisees to make shopping more convenient. As a result, e-commerce retail sales grew by 43% compared to FY18, though this created added costs for packaging and logistics.
Inter IKEA Group expects continued growth in FY20 as the IKEA e-commerce business expands. “We will continue to work with franchisees to create a seamless and rewarding customer experience in-store, online or wherever people meet the IKEA brand. Ultimately that will lead to increased sales and franchise fees for Inter IKEA Group.”
Download a copy of the Inter IKEA Group Financial Summary FY19 for more details on FY19 financial performance. On 8 November Inter IKEA Group filed its formal Annual Report and a list of Inter IKEA Group subsidiaries with the chamber of commerce in the Netherlands. All three documents are available under "related documents" on this page.
For more information contact: media.franchisor@inter-IKEA.com +31-62-124-061