Maintaining consistency and not overreacting on prices is key for retailers as consumers seek stability, the chief executive of IKEA’s largest global franchisee told Reuters on Monday.
Having raised prices during the Covid-19 pandemic due to supply chain disruptions, the world’s largest furniture retailer has reduced prices over the past two years as high inflation and weak housing markets hit consumer demand.
“Businesses want predictability and stability, but consumers also want price stability,” Juvencio Maeztu, CEO of the Ingka Group, said on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland.
“We must guarantee the greatest possible stability in low prices,” he said at the Reuters Global Markets Forum.
IKEA has been forced to raise prices again on some products in the United States, where it depends more on imports than in other markets, to offset the impact of tariffs.
Importers are bracing for a Supreme Court ruling on the legality of President Donald Trump’s sweeping global tariffs.
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Asked about that ruling, Maeztu, who took over as CEO in November of last year, said he did not want to speculate.
“What we are learning is that we must take things as they come, one by one,” he said.
“We cannot overreact, especially on prices. We need to maintain a certain level of consistency,” he added, stressing that it is more important than ever to “stand back” from short-term disruptions.
The Ingka Group, which owns stores in 32 markets and accounts for 87% of IKEA’s sales, reported its lowest annual sales since 2021 in October, after cutting prices to attract consumers.
The mood of consumers in the different markets is now a “mixture of caution and optimism, both at the same time,” Maeztu concluded.
With information from Reuters.
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