Ikea has faced a hit by Trump’s tariff plan as profits plummeted for the popular flat-pack firm, but sale volumes are up and store visitors have increased too
A popular furniture firm has reported a decline in annual profits after it focused on cutting prices to up the volume of sales, and implemented higher costs because of Trump’s tariffs.
Ikea, famous for its flat-pack furniture, said that its profit after tax for the 2024-2025 fiscal year dropped 32 per cent to €1.5 billion. According to the main holding company’s chief financial officer (CFO), Henrik Elm, Ikea “saw effects based on the big price decreases.”
After Covid-19, the Swedish retail giant increased prices. But soon, they allocated between two- and three-billion euros to reduce prices by 10 per cent over the past two fiscal years. Mr Elm added: “To lower our prices to our customers is a part of our business model and business idea.”
While 10 per cent was “a very big price decrease,” he said it had worked to break the trend and brought in both higher sales volumes and visitors to their stores.
Ikea’s sales for its fiscal year ending in late August dropped by 1 per cent to €44.6 billion. However, sales volume increased by 2.6. per cent and the number of store visitors rose by 1.9 per cent.
In a statement, Inter Ikea said: “The higher sourcing costs included the costs for increased tariffs, which have been partly absorbed.”
In September, President Donald Trump wrote on Truth Social: “In order to make North Carolina, which has completely lost its furniture business to China, and other Countries, GREAT again, I will be imposing substantial Tariffs on any Country that does not make its furniture in the United States. Details to follow!!! President DJT”.
The North American market makes up a huge 10 per cent of Ikea’s sales. Ikea have 50 stores around the US – including two in North Carolina.
Mr Elm said: “We are looking cautiously optimistic on (2026) and beyond because we are in a very good position to take the benefits we can.”
It comes as Ikea announced several store closures back in June 2025. The Plan and Order point in Stockport’s Merseyway Shopping Centre is counting down its final days, with closure set for June 16. This Greater Manchester branch, smaller than IKEA’s typical sprawling complexes, specialises in planning services for kitchens, bedrooms, and living rooms.
The Aintree Plan and Order Point at the Aintree Racecourse Retail Park only launched in December 2022 but is also scheduled to cease operations on Monday, June 16. The outlet store was a pioneer in the UK for this experimental format, but bosses said that these closures are chalked up to “a result of valuable learnings”.
Salma Azad, IKEA area manager, said at the time: “After careful evaluation, we’ve made the difficult decision to close the IKEA Plan and Order Point at Merseyway Shopping Centre.
“In the two years since opening, we’ve taken valuable learnings, including how our customers prefer to meet IKEA, and we’ll take these insights into future openings, to serve shoppers in a more impactful way.”
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