COVID-19 AS A CATALYST FOR CHANGE:
IKEA’S COUNTRY MANAGER LOOKS BACK ON A TUMULTUOUS YEAR AS THE RETAILER RELEASES ITS ANNUAL REPORT FOR FY20*
IKEA’S founder, Ingvar Kamprad, once said, “A crisis brings out the best in us.” The outbreak of COVID-19 has certainly delivered the most challenging year in living memory for the people of Scotland and for IKEA as a retail business.
Accelerating our business transformation and protecting co-workers
Despite the huge challenges we’ve faced both socially and economically, the last year has also shown that life at home has never been more important. With a disrupted economy and ongoing retail transformation, we saw total sales of £1.90 billion in FY20 in the UK. Whilst this was understandably down -10.2% on the previous year, online sales were up +31% and now represent 27% of total sales for the UK business (compared to 19% the year before).
With the onset of COVID restrictions last March, we responded by prioritising our co-workers’ and customers’ safety and wellbeing above all else, taking the voluntary decision to close stores before the first lockdown was imposed. In times of crisis, we know that stability is key, which is why we paid all co-workers 100% of their salaries, even while stores were closed to customers and without accessing government funds to do so. We also created a COVID-19 Emergency Fund available to co-workers, a decision that has helped to support financial wellbeing in times of uncertainty.
Our co-workers and stores in Scotland also led the way as we adapted our business model, with a new-found agility, to meet the realities of COVID head-on. And we pivoted quickly, launching in-store fulfilment and our click and collect service whilst stores remained closed, so that customers could continue to shop safely with us and access the products they needed to live well and work effectively from home.
Supporting our local communities through the pandemic
From the outset of the pandemic, we also prioritised supporting some of the most vulnerable in our local communities. With the backing of our global parent company, Ingka Group, we supported over 67,500 people in the UK through community efforts and charity partnerships, contributing £1.3m worth of products to those most impacted by the COVID-19 pandemic.
This support included furnishing 26 UK hospital facilities, for NHS key workers working to contain the pandemic, including close to our Edinburgh store. As well as donating 50,000 paper tape measures to Intensive Care Units, which were used to assess lung capacity. Our Glasgow and Edinburgh stores also provided hundreds of support packs to those in need, through our partnerships with the Red Cross and Barnardo’s. IKEA also installed drive thru Covid testing sites at stores in Wembley and Gateshead, to help prevent transmission of the disease within the community.
Climate action and rebuilding a fairer society
Amid the disruption that COVID-19 caused and throughout the financial year, we didn’t lose sight of the even more urgent need to tackle climate change and help regenerate our planet. Finding new ways to inspire our customers to live healthy, sustainable lives and accelerating our business transformation towards becoming climate positive and fully circular by 2030 remained high on our agenda.
Throughout the last financial year, we sold over 63 million products that help customers to live more sustainably and diverted 2.1 million products from going to waste by giving them a second life.
As a business, 100% of our electricity came from renewable sources, while water usage was down -25% and food waste produced reduced by -18%, and we collaborated with the British Retail Consortium to develop a Net Zero Roadmap for the retail industry.
With COP26 taking place in Glasgow in November, we’re determined to help drive the action necessary to limit global temperature rises and we are eager to work closely with government, businesses and our customers to demonstrate why Scotland is the best place to turn that ambition into reality and hope into action.
The future is bright
Although we were faced with many adversities during the last year, in many ways COVID-19 has been a catalyst for positive change – helping us to accelerate our transformation plans and meet our customers in more ways than ever before.
Looking to what we hope is a brighter future, we are determined to do all we can to support our business, our sector and society to build back stronger and fairer. No one can do everything, but everyone can do something, especially when we work together.