Top IKEA franchisee warns in Davos that tariffs could drive prices higher

For budget furniture retailer IKEA, the fewer trade tariffs there are the better, the CEO of Ingka Group, the biggest global IKEA franchisee, told Reuters in Davos on Monday as businesses brace for higher U.S. tariffs under President Donald Trump.

"We, and I think probably all international companies thrive from harmonized tariffs, if you like, and actually, the fewer the better because at the end of the day there is a risk in any country with tariffs that you need to, as a company, pass it on to the customers," said Jesper Brodin, speaking on the sidelines of the World Economic Forum (WEF) annual meeting in Davos, Switzerland.

Inflation and high interest rates have had a "damaging" impact on consumers over the past few years, Brodin said, adding that he sees demand improving.

"We are quite optimistic about the outlook and we already see a shift where people are returning to, I would say, a normal situation when it comes to consumption," he said.

Ingka Group, which runs IKEA stores in 31 countries and accounts for 90% of global IKEA sales, reported a drop in annual net profit and sales last year after cutting prices in an attempt to coax inflation-weary shoppers back to its big blue stores.