Ikea UK is considering using different materials including bamboo in its furniture to keep prices down after Britain’s vote to leave the European Union.
Gillian Drakeford, the UK manager of Ikea, said the furniture retailer is exploring the use of new materials as shops face up to the slump in the value of sterling since the referendum in June.
Several leading high street names, manufacturers and economists have warned that Britain faces a sharp rise in inflation next year as businesses are forced to pass on an increase in cost to consumers.
Drakeford declined to promise that Ikea will not increase prices, but said the Swedish company “will do the best we can to make sure the customer gets the best price”. This includes looking at the price of installing products for customers as well as the materials it uses.
Ikea already uses bamboo in some products, including a desk from the Lillasen range, the Rimforsa range of kitchen wares, and Ragrund bathroom accessories.
Drakeford said: “Prices are set against a number of factors and the value of the pound is something we follow, but it is very uncertain. Low price is one of our cornerstones.
“We are always looking for new materials in order to make sure we can give low prices for customers. At the end of the day, we are about the best price for the customers and we will do the best we can to make sure the customer gets the best price.”
She was speaking as Ikea announced a 8.9% year-on-year increase in sales in the UK to £1.7bn for the 12 months to the end of August. This is the fifth year in a row that Ikea has increased its British sales, securing its position as the biggest home furnishings retailer in the UK with a market share of 8.2%.
Drakeford said the company is “extremely proud” of the performance and has not changed its investment or expansion plans in the UK since the EU referendum and the drop in the value of sterling.
Ikea has opened four small order-and-collection shops in the last year, including a site in Westfield Stratford City shopping centre in east London and in Norwich city centre. The company also opened its first full-size UK store for seven years in Reading in July and will open another in Sheffield next year.
“We will always stand by the decision made by people in the country,” she said of Brexit. “The UK is a very important market for Ikea. It is the fourth biggest market and with only 8.2% market share there is a huge opportunity to double our market share and get closer to people in the market.
“We are a long-term company so we really do see the opportunity in the UK. We are continuing with our expansion.”
Drakeford also defended Ikea’s tax policy after claims by the Green/EFA group in the European parliament that it may have underpaid taxes by €1bn (£853m) between 2009 and 2014 due to aggressive strategies.
She said Ikea had paid £97m of corporation tax in the UK since 2012 and had not received any requests from the European commission for information about its tax payments. “We are a responsible company and we pay our taxes,” she said.
