Inter Ikea had a 45 per cent fall in pre-tax profit for the year 2022 up to August. The fall reflected higher raw material and transport costs as well as the closure of its factories in Russia. Operating profit margin narrowed to four per cent from seven per cent. Inter Ikea is the owner of the world's biggest furniture brand.

Retail sales hit new records in the year, but that was thanks to price hikes, not volume growth. Inter Ikea’s annual sales volumes to retailers fell by seven per cent to eight per cent, half of that due to pausing of most Ikea operations in Russia in March.

Inter Ikea may raise prices to retailers again later this year if input costs rise further, but would again not pass on all the costs. Over the past two years, Inter Ikea has absorbed a billion euros in cost inflation itself. Though purchasing costs have now topped out at an elevated level this has not happened at the speed and magnitude hoped for. With continued high costs and falling consumer confidence, Ikea is bracing for another tough year. Promotion campaigns - something Ikea usually doesn't do - and lower prices on some popular products would now be the key to attracting cash-strapped shoppers.