IKEA: The Swedish furniture giant is ditching its famous catalogue — how has it coped with COVID?

12/8/20 7:00PM

End of an era

‍This week IKEA announced some big news. The world-famous IKEA catalogue, which at one point was the most printed book in the world, is to be discontinued after 70 years. At its peak, IKEA was printing more than 200 million catalogues every single year.

The days of flicking through a huge book, only to buy another Billy bookcase, might have lasted a few more years if 2020 had been normal. But, 2020 accelerates everything, and so just 6 years after running this ad, the IKEA catalogue will be no more.

IKEA's results for the 12 months up to the end of August reveal a surprisingly resilient business. 4 billion website visits translated into online retail sales that were up 45% for the year. That remarkable growth helped to offset the physical business, where 75% of IKEA stores were closed for seven weeks on average, for a group total of almost €40bn of sales.

‍Recession proof?

‍A recession proof business, one that delivers even when the rest of the global economy is in meltdown, is a rare thing. IKEA might just be one. With e-commerce picking up most of the slack, IKEA's total retail sales only ended up falling 4% for the year.

Even the 2008/09 recession is pretty much impossible to find straight away on this chart. In IKEA's case they weathered that downturn easily, actually managing to grow their revenues very slightly. Recession or pandemic, IKEA seems to do fine. They probably won't miss that catalogue too much.

Hyunsoo Rim

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.