The trend: Discount furniture retailers are stepping up their expansion as much of the industry contracts, betting that low prices will lure inflation-weary shoppers.

Companies like Ikea and Bob’s Discount Furniture are ramping up their presence, hoping to persuade consumers to make purchases that are easy to put off during uncertain economic times. These two are leaning heavily into affordability as peers struggle with falling sales and failures.

• Bob’s is planning to open 20 US stores this year, including its first locations in North Carolina and Vermont.
• Ikea is opening at least 11 stores in the US this year, USA Today reported. Its US market share has grown by 13.6% in the last five years, the retailer said in February.
• Big Lots is reopening shuttered stores under new ownership after filing for bankruptcy last year. Variety Wholesalers acquired many locations and reopened 219 stores under the Big Lots name by early June.

Battling a slump: These moves come as much of the furniture industry has struggled. Rising inflation, sluggish home sales, and increased interest rates forced several retailers, including Conn’s, Big Lots, and American Freight, into bankruptcy in the past year. Furniture Today reported in May that 75% of the retailers in its Top 100 posted declining sales for 2024. The Trump administration’s tariff policies are expected to put yet more pressure on the industry.

Amid this shakeup, chains like Ikea and Bob’s are doubling down on price to keep shoppers coming.

• Ikea recently announced that it will cut prices at store restaurants in many global markets by up to 50% and offer free meals for children.
• That move follows Ikea slashing its wholesale prices by roughly 15% during its 2024 fiscal year. Though those price cuts resulted in lower overall FY revenues, the company said they led people to buy more, boosting its operating profit.
• Bob’s is benefiting from its no-frills, value-priced offering and focus on high-traffic shopping centers as opposed to malls. It also has in-store cafes and lets buyers create shopping carts that can be accessed online and in stores.

Our take: With consumers focusing more on value, that push could change US perceptions about shopping for furniture—emphasizing affordability and simplicity over stylish but costly designs. If Ikea’s and Bob’s bets on low prices and broader reach pay off, more rivals may follow suit.

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