Ikea To Increase Stores, Cut Prices

Global brand Ikea announced that it is increasing the number of its stores in Australia. It is also slashing prices to compete head-on with other furniture retailers.

Ikea has purchased two pieces of property in northwest Sydney and north Melbourne. The company is expected to increase its stores to 11.

The furniture retailer also said it is working on setting up a distribution center in Brisbane.

David Hood said Australia is an ideal country for those in the retail business. Despite being one of the most expensive countries to do business with, it has a solid home construction industry.

Hood is the managing director of Ikea Australia.

Hood also concedes that it’s also more expensive to hire workers in Australia compared to other counties like Japan.

Ikea, however, intends to stay in business. Apart from its store base in the east coast, the company also plans to build stores in Canberra and NSW central coast.

Hood said the company would also cut the prices of 900 products by about 50 percent. This is an addition to the cut price implemented by Ikea last year for about 2,500 items.

Ikea has about 9,000 products in its portfolio.

The global furniture brand has about 1,800 workers in Australia alone. The company makes about $650 million in annual sales. Globally, Ikea earns 25 billion euros in annual sales.

Hood said that even if Aussie consumers are still cautious on spending, Ikea would continue to work harder to maintain its average basket size stable.