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Swedish budget furniture retailer Ikea announced a new wave of price cuts \u200con Tuesday as it tries to boost demand in Europe, at a time when the surging cost of housing in many countries has dented people\u2019s ability to move and curbed spending on furniture and homeware.<\/strong><\/p>\n Ikea \u200bsaid it was investing \u20ac1.2 billion ($1.39 billion) in price cuts in total, with the aim \u200bof attracting cash-strapped shoppers and driving sales after two consecutive years of declining \u2060revenue.<\/p>\n \u201cThe cost of living is increasing and it\u2019s getting tougher and tougher for many people,\u201d \u200bsaid Juvencio Maeztu, CEO of Ingka, the biggest Ikea retailer worldwide, which operates Ikea stores in \u200bmost European countries under the franchise model run by Inter Ikea, the brand owner and furniture supplier.<\/p>\n \u201cFor many people, home is a bedroom in a shared house, and it\u2019s even more important to offer storage and \u200borganised solutions,\u201d he added.<\/p>\n In Germany, Ikea\u2019s biggest market by revenue, the retailer said it cut \u200bprices on more than 1,500 products, like the Poang chair reduced to \u20ac119 from \u20ac179. In Britain, the Kallax \u200cshelving unit \u2060was reduced to \u00a349 ($66.37) from \u00a360 ($81.26) and the Alex drawer unit to \u00a355 from \u00a370.<\/p>\n \u201cWe try to constantly optimise the cost picture by redesigning the products from the beginning,\u201d said Jakub Jankowski, CEO of Inter Ikea, which sources from its own factories as well as third-party suppliers. A redesign of \u200bthe Pax wardrobe line \u200bcut packaging costs \u2060by 70%, he said.<\/p>\n Greater automation and using renewable energy have also helped bring costs down, Jankowski said. Europe is a key manufacturing region \u200bfor Ikea, with Poland, Italy, Lithuania and Germany among its top sourcing \u200bcountries.<\/p>\n As it \u2060tries to attract new customers, Ikea has also opened seven smaller stores across Europe since January, shifting away from its traditional out-of-town big-box model.<\/p>\n Inter Ikea said its other franchisees had also agreed \u2060to price \u200bcuts: Sarton Group in the Balearic and Canary islands, \u200bMapa in Turkey, Housemarket in Greece, Cyprus and Bulgaria, Miklatorg Group in Iceland and Inter Ikea Retail in Estonia, \u200bLatvia and Lithuania.<\/p>\n<\/div>\n