The world’s leading furniture company, Ikea, reported a sharp fall in annual profits on Friday as it focused on dropping prices to boost volume and faced higher costs due to US tariffs.

The company said its profit after tax for the 2024-2025 fiscal year dropped 32 percent to 1.5 billion euros ($1.7 billion).

“We saw effects based on the big price decreases,” Henrik Elm, chief financial officer of main holding company Inter Ikea, told AFP in an interview.

After bumping prices following the Covid pandemic, the Swedish giant has allocated between two and three billion euros to reduce prices by 10 percent over the past two fiscal years.

“To lower our prices to our customers is a part of our business model and business idea,” Elm said.

While 10 percent was “a very big price decrease,” Elm

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