Ikea sees huge boost in office supply sales
Canadians have assembled 631,800 desks and counting during the pandemic
Working from home might not be everyone’s cup of tea, but it’s been a boon for Ikea.
The retail giant has seen a huge boost in Canadian sales of home office supplies during the COVID-19 pandemic, the company revealed ahead of Thursday’s official release of its annual report.
“We saw significant increases in both sales and demand for our home office category, seeing lifts from five to nearly 50 per cent across categories including home office desks, chairs and accessories,” said Ikea Canada CEO Michael Ward in an email.
Ward noted that the company sold 631,800 desks — including 45,000 sitstand desks — during the fiscal year ending Aug. 31. Home office sales have stayed high since then too, he added.
“We continue to see high demand for our home office category into fiscal year 2021. As leaders in life at home, we have a unique opportunity to be part of reshaping what home looks like in the new normal. … We know this closer relationship to home is here to stay,” Ward said.
That spike in sales of home office furnishings helped buoy what could have otherwise been a bit of a grim year for the Swedish giant, which saw sales fall by 8.7 per cent to $2.32 billion, according to Thursday’s report. The privatelyheld company doesn’t release earnings figures by country but Ward acknowledged that they were also down.
“It has been both a challenging and rewarding year,” said Ward. The company also managed to avoid laying off any of its 7,900 employees during the pandemic. The company didn’t collect any government aid during the pandemic, including the Canada Emergency Wage Subsidy, a spokesperson said.
The vast majority of Ikea’s sales are typically in store, something which took a hit when all of the company’s bricks and mortar locations were closed for three months, Ward noted.
Still, a 41.9 per cent boost in online sales to $370.7 million helped mitigate the temporary COVID closures.
“This represents a major shift in how we do business and a long-term transformation in our operations. Changes we anticipated might take years, took place in a matter of months,” Ward said. Consumer surveys have shown many of those changes in shopping habits are here to stay. According to an August survey by retail consultancy J.C. Williams Group, roughly 40 per cent of Canadian consumers say they plan to keep some of their new shopping habits even once there’s an effective cure or treatment for COVID.
While the shift to online shopping is something Ikea has been taking part in, that doesn’t mean the company is about to abandon its network of brick and mortar stores or has plans to introduce new showroom locations with smaller footprints and minimal stock, Ward said.
“We are still very much actively exploring store concepts in Toronto. We continue to move with speed to ensure we can meet our customers’ needs today,” Ward said.
During the pandemic, the company transformed the stores into de facto distribution centres for online ordering. That’s in addition to the four
Ikea online distribution centres, including a new one in Kleinburg, Ont., which opened in September 2019.
Rather than closing stores permanently as consumers continue to shift their purchases online, Ward said Ikea could transform some parts of existing stores into distribution centres for online sales.
Already, 100 per cent of online sales to Ikea customers in Alberta come from stores, rather than distribution centres, Ward said.