This is no short-lived sale we’re talking about. The company is simply continuing its never-ending quest to produce a decent coffee table, among other products, at the lowest price possible. While most retailers devote much of the time trying to figure out how to charge more for the goods they sell, IKEA’s thrifty, minimalist Scandinavian M.O. is to constantly cut the costs of design, production, transportation, materials and marketing—and the result is that retail prices across the board will be 2% to 3% cheaper this year, and an equal amount less expensive the year after.
The Wall Street Journal spoke with IKEA CEO Mikael Ohlsson, who explains the company’s frugal mindset:
“We are never satisfied. That is a large part of what makes IKEA successful. We are always critical. We ask: Why can’t we do this better? Why can’t it be cheaper? We swing between frustration and inspiration and are never complacent. If someone says, ‘Well, this is pretty good,’ then he or she is in denial. Because it can always be better,” he says.
While almost all commodity prices are on the rise, IKEA’s cost-cutting innovations are helping the retailer lower the listed prices on nearly all of its merchandise by 2% to 3% this year, and IKEA expects to decrease prices another 2% or so next year.
How does IKEA do it? By always increasing efficiency, for one thing. For another, it engages in practices that some say make IKEA “the least sustainable retailer on the planet.”
That quote comes from Ellen Ruppel Shell’s book Cheap: The High Cost of Discount Culture, and it was an environmentalist, not Shell, making those claims. In a Q&A with TIME, Shell explained some of the problems consumers concerned with sustainability might have with IKEA:
The Ikea people I met in Sweden are the nicest people you can imagine, but they were also like a cult. Their allegiance to Ikea was just beyond belief, to the point where they weren’t really thinking about what their day-to-day activities meant. They design to price: they set the price first and then do what they need to do to keep the price where it is. So whether it’s a 50-cent coffee mug or a $100 table, they do what they need to do to keep the price at that point. So if that means buying wood from eastern Russia, with its questionable timbering practices, hauling it over the border to China, with its questionable labor practices, to produce furniture for American consumer, that’s what they’ll do.
So that’s partly how IKEA manages to keep lowering prices. Next up on IKEA’s agenda seems to be an invasion of the American kitchen. Only 3.7% of kitchens in the U.S. are outfitted with IKEA products, far less than in Europe. And IKEA wants to get its products into your kitchen, as its CEO tells the WSJ:
“A kitchen is one of the bigger investments you make. And as people in the U.S. are changing homes less often than in previous years, the need to refurbish one’s kitchen is much greater,” says Mr. Ohlsson, adding: “We want to be there.”
(MORE: Q&A with the IKEAhacker)