Ikea cuts prices on popular products in Europe to attract cost-conscious shoppers

Swedish furniture giant Ikea is cutting prices across a range of popular products in Europe, including the Billy bookcase and Kallax storage units, to woo cash-strapped customers.

Ikea has seen revenue decline over the past two years as the rising cost of living reduces people's ability to invest in new furniture and home renovations.

The company is spending €1.2bn (£1bn) on the price cuts, which represent reductions of up to 28% on certain products.

Ikea said it could make the cuts by making savings throughout the supply chain, such as packaging costs.

Ingka, the franchisee which operates most of Ikea's European stores, said the cuts were "not an activity or short-term campaign".

"It's about making IKEA more affordable when people need it most, even if it means accepting a lower margin," said Juvencio Maeztu, chief executive of Ingka. "The cost of living is increasing and it's getting tougher and tougher for many people."

He added: "For many people, home is a bedroom in a shared house, and it's even more important to offer storage and organised solutions."

Ikea has reduced its prices several times in recent years, even as it caused a hit to the company's revenue and profit in its most recent earnings report.