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Ikea sales

Country or part of the world

% of sales

Germany

15

14.4

France

-

Scandinavia

10

UK

-

Other European countries

-

-

1.2

Ikea purchases

Country or part of the world

% of purchases

Other European countries

32.5

Scandinavia

28.8

-

19.2

Eastern Europe

-

-

3.3

b) Work in pairs. What are the possible reasons for the facts? Talk about IKEA's situation. Use the ideas in brackets to help you:

1. Sales in Germany account for about 15% of the total. Example: This could be because the style of furniture is very popular in Germany.

2. Sales in Sweden account for a healthy 10% of total sales. (possible reasons: Swedish design of products, environmentally friendly, cost)

  1. Sales in North America account for 14.4%. (possible reason: size of population)

  2. 19.2% of IKEA's purchases from suppliers come from the Far East. (possible reasons: low costs, availability of raw materials)

  3. 17.2% of purchases come from Eastern Europe. (possible reason: low labour costs)

  4. Only 3.3% of purchases come from North America. (possible reason: high costs there)

4. The newspaper article below is about Marks & Spencer (m&s). Read the first two paragraphs. What were profits like when the text was written? No Quick Respite in Sight for m&s*

Marks & spencer suffered at home and abroad during the first half of its financial year and the company admits that trading in recent weeks has shown no signs of improvement.

The group makes the vast majority of its profits in Britain and these fell 20.2% to £316.5 million in the six months to 26 September. The figures were slightly boosted * by a good performance from financial services, where profits rose 19% to £44.9 million. Retailing profits fell almost £88 million to £271.9 million.

Sales of home furnishings showed the biggest decline, with a fall of 1.6% over the half year and 7.1% in the second quarter. Clothing and footwear sales were 2.3% ahead in the six month period but fell 0.3% in the last three months from a 4.9% increase in the first quarter. Food was the most resilient area: it rose 2.1% overall and maintained positive sales growth over the entire six-month period.

M&S is focusing on a range of initiatives in its food departments, including butcher shops, delicatessen counters*, bakeries and coffee shops. These are expected to be introduced into 100 stores as quickly as possible.

Overseas, the Far East suffered the worst downturn, reflecting continuing economic trouble in the region. The group made a £1.2 million loss overseas, compared with £10.8 million profit in 1997.

Europe was also hit, primarily by the impact of the strong pound.

North American profits also fell from £2 million to £1.2 million.

Evening Standard

  • No Quick Respite in Sight for M&S: there is no sign that business will improve rapidly for M&S

  • boosted: improved

  • delicatessen counter: a section of a shop which sells special cheeses, cooked meat, salads etc.