Ikea's Irish arm sees profits surge due to online sales

business
People queueing outside Ikea in Dublin amid Covid restrictions. The Ballymun store is going through its second enforced Covid-19 shut-down this year. Photo: PA Images
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Gordon Deegan

 

IKEA's Dublin store at Ballymun is one of the home furnishing giant’s most successful stores worldwide.

That is according to new accounts for IKEA Ireland Ltd which shows that company pre-tax profits increased more than four-fold to €11.07m in the 12 months to the end of August 2019.

The increase in profit was achieved after IKEA Ireland last year almost doubled its online sales to €32.5m.

According to the directors, online sales made up 16% of Ikea Ireland’s €203.5m revenues last year.

The average weekly spend of €3.91m by shoppers here on Ikea goods was a 12% increase on 2018 revenues with directors stating that the increase was “largely due to the continued growth of e-commerce”.

Lockdown

The Ballymun store is currently going through its second enforced Covid-19 shut-down this year though its online store remains open along with its 'click and collect' facility for those living within a 5km radius.

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On this year’s performance, a spokeswoman for Ikea Ireland said: “While our sales have been lower, our customers’ continued support has enabled us to deliver a solid performance.”

She stated: “We are proud that we have been able to protect as many livelihoods as possible, paying our co-workers 100%, and not accessing Government support.”

The spokeswoman stated that “the outlook continues to be uncertain, but we remain cautiously optimistic about the future”.

On sales trends during lockdown, the spokeswoman stated that there has been particular demand from people working from home for desks, desk chairs, storage items, candles and picture frames.

Anniversary

Last year was the Ballymun store’s 10th anniversary here and over the 10 years, the store has recorded 30 million customer visitors with three quarters of the population having visited since it opened.

Sixty five per cent of adults here have at least one IKEA product in their home with 86 per cent of homes in Dublin containing at least one IKEA product.

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Asked if there are plans to open a second store here, the spokeswoman stated: “Ireland is a market where we believe expansion opportunities exist, however, at this moment we have no confirmed plans. COVID-19 has not had any impact on this.”

The company last year recorded post tax profits of €9.22m and the directors state that the €1.84m corporation tax charge equates to an effective corporation tax rate of 16.6%.

Numbers employed by IKEA Ireland last year decreased from 720 to 699 and staff costs increasing by 9% from €21.5m to €22.86m.

The firm’s Ballymun outlet – which is equivalent in space to five and a half soccer pitches - houses a 550-seater restaurant that serves traditional Swedish food, including meatballs served with boiled or mashed potatoes and gravy.

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