Ikea offers employees one-off bonus following Covid sales surge

Ingka Group saw the online share of its $43.4bn revenue for 2021 increase to 30 per cent from 18 per cent a year ago

A person walks past an empty product spot in the warehouse of an IKEA store in the Brooklyn borough in New York City. The retailer opened 25 new locations during the financial year. AFP

Ikea’s largest franchisee is awarding more than 170,000 employees a one-time bonus for helping accelerate web-based sales during the Covid-19 pandemic.

Ingka Group saw the online share of its €37.4 billion ($43.4bn) revenue for the 2021 financial year increase to 30 per cent from 18 per cent a year ago. That growth and staff efforts to quickly adapt stores to introduce Covid-19 safety measures mean employees worldwide will share a total of €110 million, according to a statement on Friday.

The average bonus per worker has not been disclosed but will be based on each country’s proportion of total wages and will be paid out in January.

“When the pandemic hit, we converted parts of our stores into fulfillment units within days, so that we could continue to serve our customers through click and collect when so many of our stores were closed,” said Ulrika Biesert, people and culture manager at Ikea Retail (Ingka Group). “Co-workers have had to quickly adapt, learn new skills, and work under stressful conditions. For that and so much more, we wanted to express our appreciation.”

Ikea is not the first retailer to reward staff for working in frontline retail positions where they are more likely to be exposed to potential Covid-19 infection during the pandemic. Most of Britain’s largest grocers, including Tesco, J Sainsbury, and Asda Stores, have already increased bonuses for staff. Last April, Wm Morrison Supermarkets, Britain’s fourth-largest grocer, tripled the annual bonus for staff who received just over £1,000 ($1,380), compared with an average of about £350 the previous year.

In the US, Walmart has paid a series of pandemic-related bonuses since early 2020 to workers who have helped stock shelves, pack and ship online orders, and serve customers during the pandemic.

Sweden’s Ingka operates home furnishings stores in 32 markets. The retailer opened 25 new locations during the financial year and its investment unit earlier this week announced plans to buy an iconic seven-storey building on London’s Oxford Street for £378 million. The site will host one of Ikea’s smaller stores with a format targeting shoppers less able to travel to the large, edge-of-town stores the Swedish retailer is known for.

Ahead of the Cop26 conference in Glasgow next week, Ikea launched new “Sustainable LivingShops” in the UK in a bid to help shoppers wanting to tackle climate change. The “shop-in-shops” units will showcase products that can help consumers use less energy and water, create less water and reduce single-use.