Ikea leads flat-pack furniture revolution as UK sales top £1bn

Author: By Susie Mesure

The Gulf between Ikea and its British rivals was thrown into stark relief yesterday when the Swedish retailer revealed its UK sales had topped £1bn for the first time.

The group, controlled by its founder Ingvar Kamprad, 78, proved that despite its infamous queues, the lure of its cut-price flat-pack furniture proved too strong for Britons to ignore last year.

In a year that has seen sales collapse at MFI and Courts, Ikea reported an 11 per cent leap in underlying sales. Total sales in the year to 31 August rose 15 per cent.

Peter Høgsted, who runs Ikea’s 12 UK stores, said sales had soared after it extended its opening hours and improved its customer service. The group’s Croydon store boasts round-the-clock opening on its latest catalogue, while other sites stay open until 10pm.

Ikea has had to resort to opening longer to get around the thorny issue of expansion in the UK, where disputes with planning authorities mean the group has not opened a new store for five years. An attempt to open in Stockport was turned down in August. Just one store – due to open next year in Edmonton, north London – is in the pipeline.

Mr Høgsted, who has been in his post for 12 months, declined to comment on the group’s profit figures, but said it was delivering “healthy results”. In the year to end-August 2003, pre-tax profits fell 14 per cent to £133m in the UK, according to accounts filed at Companies House.

Established furniture retailers such as DFS, chaired by Lord Kirkham, and MFI have struggled to compete against a slew of new entrants. Lord Kirkham blamed toughening competition for his decision to buy back DFS for £507m. Even do-it-yourself retailers, such as B&Q and Homebase, have expanded their homeware ranges.

Mr Høgsted said Ikea was expanding its share of the £24bn home furnishings market. But he acknowledged the changing dynamics, saying: “I think the competition is shifting, the DIY businesses are getting stronger.”

Sales across Ikea’s 179 stores, which span 23 countries, rose 12 per cent to ?12.8bn (£8.8bn).

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