Everyone has heard of IKEA. It’s the big blue and yellow store that looks like a huge box – and it’s filled with all kinds of furniture for you to buy and take home.
But just lately it seems as if fewer and fewer people are going to be buying any kind of furniture at all. The state of the housing market, coupled with the fact that fewer people have any money to spend on such items, means that IKEA has been battered with much lower sales than it was expecting.
Of course, it is known for offering cut price goods and unbelievably cheap items in some cases. Nests of tables, sofas and even kitchens are all available quite cheaply if you know which ranges to look at. But that doesn’t mean you can expect to see the sales at the stores going up any time soon. In fact, things look rather bad because staff numbers are set to go down again.
There was a time when you never heard of any redundancies taking place at all in IKEA. But things aren’t like that any more. This recession has hit the furniture market hard, and at least in that sense IKEA is not alone in its woes. Many companies have gone to the wall, so the fact that IKEA is still going says a lot for the way that it does business, and the people that it is marketing its goods to.
But in the end we always stop buying non-essentials first. If that means we have to postpone furniture related purchases – from nests of tables to a whole new room design – then that is what we will do. And companies like IKEA need to be prepared for that.
The word that IKEA’s founder, Ingvar Kamprad, has continually used during these tough times is efficiency. If sales are down and there is less footfall in the stores, then staff numbers are cut back so they can become more efficient. It is the way of business of course, but that won’t reassure the staff.
In the end we must ride out the recession and once it is over and things are looking up, we will all start to think about buying more furniture again to replace what we have now. But how will companies like IKEA fare if the depth of the recession leads to a new way of living?
Many people are becoming more frugal and learning to live on less money. They are also learning to make things like furniture last longer – and to save up for them rather than buying everything on credit. It is credit that has largely been to blame for the recession in the first place, so hopefully we will end up learning our lessons.
But in the meantime IKEA must accept that its sales are down, and will remain so for quite some time yet. Only time will tell how long that will be for, but let’s hope it doesn’t go on for the foreseeable future.