IKEA Pushes for More Stimulus Amid China's Economic Turbulence

Swedish retailer IKEA has called for additional economic stimulus from China, as it faces declining sales impacted by the ongoing property crisis. IKEA's financial performance is closely tied to housing market conditions. Despite challenges, the company is optimistic about future prospects following recent Chinese stimulus measures.

The Swedish furniture giant IKEA has called on China to implement further economic stimulus, following a set of government measures aimed at reviving the country's economy, heavily affected by a property crisis. IKEA sales dropped 5% in their fiscal year ending August 31, a decline closely related to shifts in property markets and interest rates.

Jesper Brodin, CEO of Ingka Group that operates most IKEA stores worldwide including those in China, noted that consumer confidence in China lags behind the global average. Nevertheless, IKEA remains hopeful that the recent stimulus incentives will generate positive outcomes. Brodin encouraged additional market stimulating actions, highlighting the need for more support.

While Ingka Group's sales from China decreased slightly as a percentage of overall global sales, IKEA continues its efforts in the region, signified by the opening of a fourth store in Shanghai. Price adjustments have sparked a sales increase, notably in the VALEVAG mattress category. China's major monetary stimulus, introduced two weeks ago, will undergo further elaboration by the finance ministry shortly.

(With inputs from agencies.)