IKEA reported a drop in annual sales blaming store closures early in the coronavirus pandemic but said consumers have flocked to its stores since lockdowns lifted to buy desks, chairs and kitchens.
About 75% of the furniture retailer’s stores were closed for between seven to 10 weeks because of coronavirus lockdowns. That resulted in visits to IKEA stores falling nearly 16% for its fiscal year, and lower revenue from its restaurants, which typically make up about 5% of sales.
Overall, Ingka Group—the largest IKEA franchisee and operator—on Tuesday reported sales of €35.2 billion, equivalent to $41.5 billion, for the 12 months to Aug. 31, down from €36.7 billion a year earlier. It didn’t disclose profit figures.
Chief Executive Jesper Brodin said in an interview that consumption trends around the world had been similar through the pandemic. Early on, shoppers bought desks, office chairs and cooking equipment. Interest then moved toward home organization items such as shelving and baskets. Demand for kitchens was also high, with people taking advantage of time at home to install them.
“Lately, we see a lot of interest in beautification,” said Mr. Brodin. “A lot of people are taking the opportunity to update their homes.”
The comments echo those from rival
Home Depot Inc.,
which in August posted its strongest quarterly sales growth in nearly 20 years, saying the home had never been more important to consumers than during the pandemic.
IKEA said online sales grew 60% and now make up 18% of the company’s overall revenue, up from 11% a year ago.
To meet surging online demand, IKEA repurposed its stores to act as fulfillment centers, rolled out click-and-collect at new locations and