Ikea hails recovery in consumer sentiment Ikea's chief executive hailed a broad-based recovery in consumer sentiment around the world as the Swedish flat-pack furniture retailer seeks to put a "challenging year" behind it. The world's biggest seller of furniture reported a rise of just 3.1 per cent in both net profit and sales in the year to the end of August, well below the average 10 per cent revenue growth it is targeting this decade. But Peter Agnefjäll, Ikea's chief executive since September, told the Financial Times: "Consumer spending is improving . . . The fuel from the US is actually climbing over the Atlantic. Last year we had a turnround in the UK and it is continuing in a good way . . . Some of the markets that have been more challenging - which has been basically the Mediterranean countries - we see positive signs of activity. Ikea's performance last year has caused some, including its chairman, to doubt whether the retailer can meet its own target of doubling sales to €50bn by 2020. The privately owned Swedish group thinks it can reach this by 5 per cent growth in sales in existing stores each year and a 5 per cent increase coming from new stores. Mr Agnefjäll stuck by the target: "We have a directional target of €50bn by 2020 and that we stay committed to. Where are we going to end up by 2020? Who knows. But that is the target we have and we believe it's reachable otherwise we wouldn't have had it. And we love challenges, and now we are really rolling up our sleeves. In 2012-13 revenues grew by 3.1 per cent to €27.9bn while net profit rose to €3.3bn. Ikea opened just five stores, the lowest number in decades. But Mr Agnefjäll said this calendar year it should open "more than 10" as it ups its investments by more than a quarter to €2.5bn. The countries with the fastest growth were China - where Ikea is opening three stores a year - and Russia. But Mr Agnefjäll praised the performance of the US, where sales grew by 6-7 per cent. The US is remarkable . . . We see two things: the unemployment rate is the lowest since 2008, and secondly the housing market is picking up and people are starting to move again and that is an important factor for the growth of Ikea. For the first time in six years, Ikea will pay a dividend - of €3bn - to its owner, the Dutch-registered Stichting Ingka Foundation, which is only allowed to spend the money on investing in the retailer or charitable donations. It still has €16bn of gross cash on its balance sheet. Ikea, which has 305 stores and 135,000 workers, has only revealed its profit figures for the past four years and so they are eagerly pored over by retail experts. It increased its gross margin - a crucial profit indicator for retailers - by 1.5 percentage points to 43.3 per cent, despite decreasing prices by 0.2 per cent. But its performance lagged behind one of its biggest rivals, South Africa's Stenhoff International, which owns the French brand Conforama. Stenhoff's international retail business increased sales by 10 per cent and operating profit by 23 per cent in the year until the end of June.