Ikea cuts restaurant prices: Up to 50% discount for hungry families!

Ikea cuts restaurant prices: Up to 50% discount for hungry families!

Especially at a time when many people have to watch their pennies, Ikea has announced a measure that will make many families happy. From now on, the furniture giant is reducing prices in its company-owned restaurants by up to 50 percent on weekdays, and children eat free of charge. This offer is not only a financial bright spot, but also marks a strategic move to regain consumer trust, which, according to Tolga Öncü, COO of Ikea Retail, has suffered in recent years. The price cuts are intended to help stretch consumers' budgets and make Ikea more attractive in an increasingly price-sensitive market, reports dayticket.io.

A look at the previous price trends shows how much the food prices in the Ikea restaurant have been influenced. The price for a plate of the popular Köttbullar dishes, which is currently 6.95 euros, could even fall to under four euros with the reduction. The price reductions are part of a larger plan to stabilize sales after Ikea posted a 5.3 percent decline to 45.1 billion euros in the 2024 fiscal year. Such measures are also crucial in the German market, where Ikea generated around 6.1 billion euros in sales, in order to retain customers and win new ones.

Background of the price reductions

But it's not just the restaurants that are affected. Ikea has already reduced purchasing prices by an average of 15 percent this year, which has also influenced the final prices for customers. This strategy cost the company 2.1 billion euros and led to a further decline in sales, according to investmentweek.com. The background to the price increases in recent years are supply chain problems and rising material costs, which were further exacerbated by the COVID-19 pandemic and the war in Ukraine. In 2022 there was an average price increase of nine percent worldwide.

However, CFO Henrik Elm noted that prices, adjusted for inflation, are at 2019 levels. The current interest rate situation provides the company with a small buffer while it lowers prices and woos lost customers. However, it remains uncertain whether these price reductions can lead to higher customer loyalty in the long term.

Ikea's future plans

Ikea has also announced that it will expand its range. New Asian dishes and the first own falafel are to be added in order to strengthen the target group of older people, who are also to be addressed as part of the “Silver Economy”. One goal is to acquire around eight million new customers, which is a huge challenge given the increasing fragmentation of the market.

On the German market, Ikea is still the largest single store with 54 furniture stores and around 19,500 employees. Despite the challenges, Ikea is optimistic: Managing Director Jesper Brodin predicts that in the next two years more than half of people in Germany will want to move and create a new home. This could put the furniture retailer in a good position to benefit from a potential boom in demand, he said dasweltbild.de.

The coming weeks and months will show whether Ikea's price offensive can have the necessary effect or whether the company will have to resort to other measures to stabilize sales.