Ikea has cited changes in the Euribor rate and cautious spending as factors in the fall.

Despite this, Ikea is launching its first small-format store in the Baltic states this summer, in Pärnu.

Runikon Retail, which owns and operates Ikea outlets in Estonia, reported a fall in both revenue and profit in its latest financial reporting year, September 1, 2023, to August 31 last year.

Over that time, revenues fell from €95.2 million to €90.96 million.

The company said the bulk of this revenue — €85 million — derived from the retail sale of furniture and lighting; food and grocery sales contributed a further €4 million, while service sales generated €1.9 million in revenue.

Profits, as noted, dropped to €6.67 million, a fall of nearly 29 percent.

Runikon Retail stated: "Among other factors affecting last financial year's revenue were the high Euribor rate, which impacted the real estate market, as well as slower market growth due to geopolitical reasons, more cautious spending by Estonian residents, and a reprioritization of expenditures."

The company also noted that a key focus of the past financial year had been lowering retail prices, which impacted overall sales revenue too.

Runikon Retail said despite this, it remains committed to increasing revenue in the coming financial year.

A total of €1.3 million will be invested in setting up the planned Pärnu store, with an additional €550,000 allocated for digital development, the company said.

As of the end of the reporting year, Ikea Eesti employed 459 people, with total labor costs amounting to nearly €12.1 million.

Ikea Eesti began operations in 2019 with a planning and ordering point.

The full-scale Ikea store, located in a retail park in Kurna, just south of Tallinn, opened amid great anticipation in 2022; a smaller outlet in Tartu was also expanded in August last year.

--

Follow ERR News on Facebook and Twitter and never miss an update!