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Ikea's profits hit by price cutting

James Thompson
Wednesday 06 March 2013 18:53 EST
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The flat-pack furniture giant Ikea has posted its lowest profits for three years in the UK.

But annual sales rose last year at the furniture retailer, which has 18 stores, suggesting that its bottom line took a hit from investing in its operations and cutting prices to match cut-throat competition.

Pre-tax profits tumbled 20 per cent to £19.8m over the year to 31 August – its worst performance since 2009.

Ikea plans to introduce its 19th UK store in Reading but declined to say when this will open.

The retailer's revenues rose by 6 per cent to £1.26bn last year, boosted by booming online sales.

In its annual report, Ikea said: "Despite the uncertain retail environment, we remain confident that our expansion plan, investment in e-commerce, investment in other services and our commitment to quality and price will enable us to strengthen our market position."

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