London — Ikea, the world-renowned Swedish furniture retailer, has joined the ranks of global businesses raising alarms over the potential financial fallout from trade tariffs. Jesper Brodin, CEO of Ingka Group, which operates most of Ikea’s stores worldwide, has expressed deep concern about how such measures could undermine the company’s ability to keep prices accessible, a cornerstone of Ikea’s mission.
In an interview with CNN ahead of Ikea’s latest pop-up shop opening on London’s Oxford Street, Brodin reflected on the pressures tariffs impose on international businesses. He described tariffs as a significant hurdle to maintaining affordability, warning that additional costs are likely to be passed on to consumers. “We have never experienced a period of benefit when we had high tariffs,” he stated, emphasizing that such policies not only disrupt corporate operations but also place a burden on household budgets.
The concerns arise from the United States’ announcement of a 10% tariff on Chinese imports, a policy the government claims is designed to curtail the flow of illegal drugs into the country. The move has stirred controversy among business leaders and governments alike, with critics pointing to the cascading effects on global supply chains and consumer prices. For Ikea, which sources approximately 30% of its goods from Asia—primarily China—the impact of these tariffs could be significant.
Despite the uncertainty, Ikea has chosen not to shift its production strategy. Brodin highlighted the company’s dedication to maintaining long-term partnerships with its suppliers, which span over a decade on average. This approach underscores Ikea’s commitment to stability and ethical business practices, even as geopolitical tensions mount.
To shield consumers from the pressures of inflation, Ikea recently took an extraordinary step by cutting prices on 2,000 products, a move that cost the company more than €2 billion ($2.1 billion). This decision reflects Ikea’s ethos of prioritizing accessibility over profit margins, even as it led to a dip in revenue in monetary terms. Nevertheless, the volume of items sold increased, demonstrating the resonance of Ikea’s affordability-first strategy with its global customer base.
Against the backdrop of these challenges, Ikea is doubling down on its investment in London, one of the world’s premier retail destinations. On Thursday, the company will unveil a temporary pop-up shop, affectionately named Hus of Frakta. The space celebrates the brand’s iconic blue carrier bags, offering visitors the chance to personalize their own and browse a selection of around 100 products.
This pop-up marks the prelude to the grand opening of a flagship Ikea store on Oxford Street, slated for spring next year. Located in the former Topshop building, the store will span three floors and deliver the full Ikea experience, including its famed Swedish meatballs. The seven-story building, which Ikea acquired for £378 million ($476.6 million), has undergone extensive renovations to transform it into a modern retail space while respecting its historic character.
Ikea’s decision to establish a central London presence is driven by shifting consumer habits, with urban shoppers increasingly favoring convenience and proximity. The new store will cater to customers who may find Ikea’s larger suburban outlets in Wembley and Croydon less accessible.
Looking ahead, Brodin reiterated his belief in the importance of adapting to global economic trends. While critical of tariffs, he acknowledged the need for flexibility in navigating the complexities of international trade. For Ikea, staying true to its vision of affordability and innovation remains paramount, even in the face of global challenges.
