Booming demand for rent-friendly furniture has helped boost sales at Ikea.
The home furnishing retailer toasted its sixth year of growth in the UK, after capitalising on the demands of Generation Rent.
Like rival John Lewis, Ikea has managed to broaden its customer base by making furniture for those living in smaller spaces or renters who are constantly on the go.
It launched Ikea PS 2017, a transforming collection of furnishings for renters in February.
Items include a folding sofa that can hang on a wall, a pillow that turns into a quilt and a self-watering flowerpot that keeps unattended plants alive for two weeks.
It sells a two-seater white sofa bed for £345 and a room divider for £45.
Ikea said it has also made its product range more relevant to the modern home, by introducing smart lighting and indoor gardening kits which allow customers to grow food at home.
The changes have sparked a sales bonanza for the firm, which saw its sales increased 5.8 per cent to £1.8bn in the year to August 2017 – while its market share grew by 0.5 per cent to 8.1 per cent. It hopes to increase its market share to 15 per cent by 2027.
Living room seating sales grew 11pc, cooking equipment sales were up 10 per cent and home textiles, which include cushions and bedding, were up 10 per cent.
Ikea, which is celebrating its 30th year in the UK, saw more than 57.2m people visit its stores and 175.8m visit the Ikea website.
The firm has boosted sales despite the challenging retail environment, which has seen other homeware companies issue profit warnings.
In October DFS reported a 22.3 per cent plunge in full-year profits after admitting the challenging furniture market had hit its bottom line. That same month, Topps Tiles said it expected its full-year earnings to come in at the lower end of expectations after weak consumer confidence dragged down sales.
Dunelm warned in September that British consumers were facing a spending squeeze after posting a 2.4 per cent slump in full year sales and a 15.2 per cent drop in profits to £109.3m.
Ikea does not disclose its UK profits but admitted it had been forced to absorb the increased costs following the fall of the pound, in order to avoid deterring customers.
Gillian Drakeford, retail manager of Ikea UK & Ireland said: ‘Despite a level of economic uncertainty our brand is even more relevant and we continue our efforts to bring affordable well-designed home furnishing solutions to the UK.’
She added that the post-Brexit fall in the pound had pushed up the business’s costs by 13.7 per cent as it relies heavily on imports. However, Ikea only increased prices for shoppers by 3.6 per cent.
‘The Brexit vote has been on everyone’s lips and the devaluation of the pound has been a challenge for many businesses,’ she said.
The firm said it has lowered prices on some of its most popular ranges, such as the Stocksund sofa, which has been cut to £399 from £425.
Ikea was founded in Sweden in 1943 and has been the world’s biggest furniture store since 2008.