Half prices and free meals for children: Ikea wants to 'support customers amid cost-of-living pressures'

Ingka, the holding managing about 90% of IKEA retail sales, has announced substantial price cuts for its restaurants. These "efforts" are aimed at helping customers with low prices "while ensuring strong performance and long-term growth."

No need to mention köttbullar, the traditional Swedish recipe that many people call "Ikea meatballs." And for good reason: hundreds of millions of customers visit the yellow and blue chain's restaurants every year. Ikea has made affordable food a strategic lever. Busy investing in the in-store customer experience, the Ingka group has announced that meal prices will be temporarily halved in these restaurants. This promotion will run from Monday to Friday, while children can eat for free.

"For example, in France, the price of lunch for a family of four, including two hot dishes with meatballs for adults and two children's meals, will cost €6.96 instead of €19.90," the company said in a press release, adding that all restaurant customers will receive a €5 voucher to spend on supplies. However, the announcement remains unclear on the effective dates or which of the 31 participating markets it operates.

From the buffet to other furniture

This new pricing policy is rooted in a perceived current reality: rising cost of living pressures and economic uncertainty. However, the group still intends to use it as a commercial acquisition and conversion strategy.

“Food has always been very important to Ikea, and we wanted to enable even more people to enjoy our food offering while exploring our home furnishing range,” said Tolga Öncü, Ingka Retail Manager.

It is unclear at this stage whether Ingka is implementing a major "loss-leader" strategy, a loss-leading pricing strategy designed as an investment to stimulate more profitable sales. The free childcare offer, the terms of which are not detailed, targets families, who represent a significant portion of the customer base. The approach theoretically reinforces Ikea's image as a customer-focused company.

In a competitive restaurant market where prices are rising, Ikea restaurants will stand out. It remains to be seen whether this will give the company a decisive advantage over other retailers, or even fast-food chains.

For some consumers, "cut-price" prices may raise questions about the quality of ingredients or preparations. Ikea will need to ensure that the perception of value remains high despite the very low prices.

New assortment to “remain a destination for food”

Alongside the price reduction initiative, new dishes inspired by Asian cuisine will be introduced in Ikea restaurants. Through this dual strategy of reduced prices and a diversified offering, Ikea's parent company hopes to attract around 8 million new customers.

Ikea's food offerings will also be revised. The Swedish food aisles and bistro menus will feature new products, including plant-based options. The retailer's owner wants its stores to remain "a multi-format food destination."

“We will soon be launching our first falafel, adding this popular food to our restaurants and, later, to our Swedish Food Markets. Good quality, low prices, and making a positive difference for the planet – these ingredients remain a common thread running through our food business,” said Lorena Lourido Gomez, Global Food Manager, IKEA Retail.