Ikea posts record profit as consumer spending recovers

Swedish furniture maker Ikea said its profit rose 3.1 per cent in the 12 months through August 2013 as it saw signs of recovering consumer spending around the world.

It posted a net profit of 3.3 billion euros ($5 billion Cdn), a record for the company, while sales rose 3.1 per cent to 27.9 billion euros ($42.5 billion).

Retailers have been struggling worldwide amid the economic downturn, but Ikea said consumer spending was up last year in many markets, including the U.S., Russia and China.

"Consumer spending is improving in many countries," CEO Peter Agnefjall said in a statement. "While the challenging economic situation may not be over, there are positive signs."

Already the world’s largest furniture chain, Ikea saw increasing market share in almost all the countries it operates in, and same-store sales were up by 1.8 per cent.

Even southern Europe, still suffering from the effects of the downturn, was showing some positive signs, though sales fell in Spain and Italy, the company said.

Ikea said emerging markets are an important growth area and it is currently making plans for its first store in India. It opened five new stores in 2013, two of them in China.

The chain also plans to build a larger online component.

Ikea said it planned to invest $3.8 billion this fiscal year in stores, factories, renewable energy and shopping centres.

"By creating better products at lower prices, being more inspiring, improving our existing stores, opening new stores and expanding our e-commerce offer, we plan to double sales by 2020," Agnefjall said.