US inflation exceeds expectations to hit 2.4pc

Swedish furniture retailer IKEA has urged China to deploy a further stimulus, ahead of government announcement planned for Saturday that is expected to outline plans to reinvigorate the economy.

Falling Ikea sales, which we reported on earlier, are highly sensitive to property markets and interest rates as people spend more on furniture and homewares when moving house, and downturns tend to dent activity.

Jesper Brodin, CEO of Ingka Group, which runs most Ikea stores globally, including in China, said:

Still we see consumer confidence in China is slightly lower than the global average, [but] we are optimistic that the stimulus package will have a positive impact.

We would like to encourage even more stimulation to the market because the market needs a little extra boost.

China accounted for 3.5pc of global sales for Ingka Group in its 2023-24 financial year, down from 3.6pc in the previous year.

In September, Ingka opened an Ikea store in the Changning District of Shanghai, its fourth in the city. Ikea now has 39 stores in China, four more than in its 2022-23 financial year, and it said store visits increased by 11pc over the year.

Since entering China in 1998, Ikea has expanded aggressively and the country was for several years in its top five markets by revenue, but its relative significance has since fallen.

In an effort to reverse its economic downturn, China unveiled two weeks ago its most aggressive monetary stimulus package since the Covid-19 pandemic, coupled with extensive property market support.

Tolga Oncu, retail manager at Ingka Group, said:

We are quite excited to see what this [stimulus] would mean for the Chinese economy and in particular for the Chinese home furnishing market. We are doing the assessment as we speak.