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Russian Economic Crisis to be slash by IKEA

Swedish furniture giant IKEA is set to
slash its Russian prices by up to 40 percent in a bid to reach the country’s cash-strapped consumers. 

One in five products will see a price
drop of between 15 to 20 percent, IKEA’s Russia chief Walter Kadnar
told the Vedomosti newspaper.
Some prices will fall by as much as 40
percent, he said.

Kadnar claimed that the changes were
part of a long-term strategy to boost sales among Russia’s
struggling middle classes.

“Disposable consumer income has
decreased, and we are trying to attract as many customers as possible by keeping prices low,” he said.

Kadnar
also said the the growing strength of the ruble had helped the company
to lower costs, but warned that economic or political rest could trigger
rapid price changes.
IKEA’s
worldwide net profits increased by 20 percent last in the fiscal year,
with the company earning 4.2 billion euros (4.5 billion). Sales in
Russia increased by 1 percent.
The company first entered the Russian market in 2000, and currently runs 14 stores across the country.

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