Ikea Cuts Price of U.S. Shelves as Outlook Dims [View All]

[marmar]

(Bloomberg) Ikea, the world’s biggest home- furnishings retailer, has slashed the price of its Billy bookshelves in the U.S. by 17 percent as unemployment and a sluggish housing market weigh on consumer confidence.

U.S. outlets now sell the signature bookshelf for $49.99, compared with the $59.99 listed a year ago, according to data compiled by Bloomberg News from the Netherlands-based company’s website. Based on dollar prices, the average cost of the item in 39 countries rose 13 percent to $62.49 in that period.

With unemployment above 9 percent and housing starts about 73 percent below a 2006 peak, confidence among American consumers is at the lowest in more than two years. Payrolls growth stalled last month, and President Barack Obama proposed a $447 billion jobs plan last week to boost growth.

“Housing is not participating in the recovery, so consumer spending related to housing is not growing,” James Shugg, a senior economist at Westpac Banking Corp. in London, said in a telephone interview. “Given that furniture’s been the worst category in a pretty sick retail sector, it doesn’t surprise me that you’ve seen pretty hefty price reductions.” ............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-09-11/ikea-cuts-price-of-u-s-shelves-as-outlook-dims.html