The big-box chain Ikea keeps getting bigger as it builds up its smaller city stores, grows online sales and expands into new markets.
The affordable furniture company reported global sales grew 4.5% in the latest financial year to hit €38.8bn (£33.9bn, $44.6bn). The company’s fiscal year runs from September to August.
Sales growth at existing stores was flat, but this was offset by a 31% jump in online sales. Online purchases now make up 5% of global Ikea sales, the company said. The Ikea.com website gets more than 2 billion visitors each year.
The company has also seen strong growth in new markets, according to Ikea’s CEO Torbjorn Loof.
Ikea recently opened its first locations in India and Latvia, and has plans to being selling in more than 10 new countries in the new financial year, including Mexico, Luxembourg, Chile, Columbia and Peru.
“Ikea has seen continued growth despite a challenging and changing retail environment,” Loof said in a statement.
The smaller Ikea stores cropping up in central urban locations are also providing new opportunities for the company to increase sales and customer engagement.
“We’re exploring new store formats in city centres – all with the aim to improve the meeting with our customers both physically and digitally,” said Jesper Brodin, CEO of Ikea’s Ingka Group, which operates Ikea stores in the US, Europe, China and other international markets.
Ikea unveiled a strategy shift last year towards opening urban showrooms.
It is also investing in better services ranging from augmented reality apps to delivery and assembly, as competition grows and the appeal of its out-of-town warehouse stores dims on the back of the online shift.
With files from Reuters
CORRECTION: An earlier headline incorrectly stated Ikea made a €39bn profit, instead of €39bn in sales.