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IKEA posts record profit, sees consumer recovery worldwide

IKEA posts record profit, sees consumer recovery worldwide
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IKEA has posted record full year profits and said it was seeing signs that consumer spending was starting to recover in many of its markets.

Net profit for the 12 months up to August 2013 was 3.3 billion euros – an increase of 3.1 percent on the same period a year earlier.

IKEA reported strong growth in China, where it opened two new stores, as well as in Russia and the United States.

“Consumer spending is improving in many countries,” IKEACEO Peter Agnefjall said in a statement. “While the challenging economic situation may not be over, there are positive signs.”

Southern Europe, still suffering from the effects of the downturn, was showing some positive signs, but sales fell in Spain and Italy, the Swedish group said.

Retailers have been struggling particularly in Europe, where IKEA generates nearly 70 percent of its sales.

The global economic downturn and austerity measures, mostly in eurozone countries, have hit consumer sentiment and spending power.

The company revealed it planned to invest 2.5 billion euros this fiscal year in stores, factories, renewable energy and shopping centers.

“By creating better products at lower prices, being more inspiring,improving our existing stores, opening new stores and expanding our e-commerce offer, we plan to double sales by 2020,” Agnefjall said.

IKEA – which has been relatively slow to embrace the internet – is aiming for online availability in all its markets, but does not say when it will achieve that.

Currently it sells online in half its 26 markets.

Neither did it reveal what percentage of its sales come via the internet.