Ingka Group, the owner of IKEA, is aiming to reopen its stores in Europe by May and is expecting an increase in demand for baby products.
In his recent interview, Ingka Group CEO Jesper Brodin talked about the furniture company’s plan post-coronavirus. IKEA is among the many retail stores that were forced to shut their business down amid the pandemic.
In-store sales amid pandemic dropped, online sales skyrocket
As the infection rate in Europe slowly drops, IKEA, the largest furniture retailer, is looking to end its store closure by the end of April — mainly its shops in the main market Europe and North America.
The unexpected closures left a massive dent to the company’s revenue. “The sales in the period we are in dropped for about 60%,” the CEO shared and added that the estimated period of closure for each of its stores would be up to eight weeks.
IKEA’s online sales, on the other hand, showed a positive note for the retailer’s coming months and years.
Brodin explained that while in-store purchases slipped rapidly, IKEA’s online sales skyrocketed as people turned to online buying due to city lockdowns.
He also mentioned that the sales during said period were twice as high last year, tempering the largest dive in the furniture company’s revenue caused by the coronavirus pandemic.
The Ingka Group sees to speed up its expansion in inner cities as well, with stores smaller than the iconic giant shops.
Furthermore, sales in IKEA’s stores in China bounced back quickly after reopening all its shops except the one in Wuhan, the place where coronavirus reportedly originated.
Brodin expects a post-coronavirus baby boom
Given that millions of people are locked in the comfort of their homes, the CEO said he is anticipating a surge in demand for baby-related products, citing that crises like this before resulted in baby booms.
The company is now planning to stock up more of its baby products as a preparation, according to IKEA’s CEO.
Another observation pushed the furniture retailer to cut prices on some of its items.
Per Brodin, the demand was high for goods in IKEA’s lower-end price change and is expecting such a trend to continue as the global economy slowly recovers.
“Tendencies are similar to what we saw in 2008 recession, that people have less money,” he added. As of this writing, the group is looking to cut prices on more of its items in the coming year.
On a good note, the CEO is positive that the company’s group sales will rally around 90% of year-earlier levels by September next year.
Still, the company expects things will be more stringent in the next months, especially next year.