How IKEA Is Keeping Its Furniture Affordable

In this episode of The Journal, host Ryan Knudsen speaks with Juvencio Maestu, CEO of the Inca Group—the largest IKEA retailer in the world—about how the company is maintaining affordability amid global economic turbulence. Despite rising inflation, energy crises, and unpredictable tariffs, IKEA has made the bold decision to cut prices by 2 billion euros in 2024, prioritizing customer value over short-term profits. Maestu explains that this 'counterintuitive' strategy—like lowering umbrella prices when it rains—reflects IKEA’s core mission to serve the 'many' rather than exploit market conditions. The company has also invested heavily in renewable energy, producing double the electricity it consumes, which shields it from oil shocks like the closure of the Strait of Hormuz. Meanwhile, IKEA is evolving its retail model with smaller urban stores, blending physical and digital experiences while learning from past mistakes. Maestu emphasizes that affordability and long-term vision—thinking 200 years ahead—are central to IKEA’s identity, even as technology and society change. The episode reveals that IKEA’s success lies not in chasing affluent consumers, but in delivering high value for money to everyday people. Despite falling sales in 2024, the company rebounded in 2025 with increased customer visits and revenue growth. Maestu shares personal insights, including his love for the IKEA hot dog as a symbol of quality at low cost, and reflects on the enduring importance of home, human connection, and sustainability. Ultimately, the story is one of resilience, strategic discipline, and a commitment to a vision that transcends economic cycles.