Ikea invests €1.2 billion in European price cuts across 1,500 products

Scope of European price cuts

Ikea announced a €1.2 billion ($1.39 billion) investment in price cuts across Europe on 1 September 2026, targeting more than 1,500 products in more than 20 countries. The initiative is intended to bolster demand following two consecutive years of falling revenues, as high housing costs and persistent inflation restrict household spending on home furnishings. Products across multiple categories will see average reductions between 15% and 25%, with each national market adjusting roughly 900 items. To support markets outside Europe facing currency volatility and inflation, Ingka Group committed an additional €70 million for operations in Asia and North America.

The cost of living is increasing and it's getting tougher and tougher for many people.

Country-level price adjustments

The price cuts vary across individual European markets, focusing on storage units, living room furniture, and bedroom lines. In Germany, Ikea's largest market by revenue, reductions affect over 1,500 items by an average of 20%, including a 27% decrease on the Besta television unit and a drop on the Poang chair from €179 to €119. In the United Kingdom, the Billy bookcase fell by 28%, the Trofast storage set by 24%, the Alex drawer unit from £70 to £55, and the Kallax shelf from £60 to £49. In Italy, prices dropped by an average of 22%, with Kallax storage units falling by up to 29% and Besta frames by 26%.

In Spain, Ingka Group and Inter Ikea are investing €53.4 million for fiscal year 2027 to lower prices on 397 items by an average of 21%, including the Kivik sofa, Brimnes line, and Nissafors trolley. Ikea Ireland introduced a €6 million package reducing 457 products by up to 25%, bringing a standard double mattress from €299 to €229 and the Kallax unit from €70 to €59. The reductions take effect across European retail partners, including Sarton Group in the Balearic and Canary islands, Mapa in Turkey, Housemarket in Greece, Cyprus and Bulgaria, Miklatorg Group in Iceland, and Inter Ikea Retail in the Baltic states.

I strongly believe this is not a one-off. We will continue to do it. It's a long-term commitment.

Supply chain adjustments and store formats

Inter Ikea and Ingka Group attributed the price adjustments to manufacturing efficiencies, automation, and expanding renewable energy across production facilities. Redesigning product lines reduced logistics expenses, with updates to the Pax wardrobe line cutting packaging costs by 70%. Inter Ikea noted that suppliers will not face cost pressures from the lower retail prices, expecting that higher unit volumes will offset lower margins. Key manufacturing centers in Poland, Italy, Lithuania, and Germany supply the European network.

The pricing rollout coincides with changes to Ikea's physical store footprint. The retailer has opened seven smaller urban stores across Europe since January 2026, departing from its traditional suburban big-box warehouse format. The initiative follows earlier post-pandemic reductions, including price lowering in 2023 and between €2 billion and €3 billion spent on price decreases since 2024. Full-year revenue results for the fiscal year ending in August will not reflect the new cuts, with financial impacts projected for the upcoming reporting period.