IKEA Cyprus is joining a new wave of price cuts announced on Tuesday as the Swedish furniture retailer seeks to revive demand amid rising housing costs and squeezed household budgets.

According to a report from Reuters, the price reductions are part of a €1.2 billion investment by IKEA retailers across Europe, aimed at attracting cash-strapped consumers following two consecutive years of falling revenue.

“The cost of living is increasing and it’s getting tougher and tougher for many people,” said Juvencio Maeztu, CEO of Ingka, IKEA’s biggest retailer.

“For many people, home is a bedroom in a shared house, and it’s even more important to offer storage and organised solutions,” he added.

In Cyprus, the IKEA franchisee Housemarket is among the operators that have agreed to implement price cuts.

Cyprus has one IKEA store, in capital city Nicosia, while a second plan and order point operates in Limassol.

It should be noted that Housemarket also operates IKEA stores in Greece and Bulgaria.

The wider reductions include more than 1,500 products in Germany, IKEA’s largest market by revenue, while prices have also been lowered on selected products in Britain.

IKEA said redesigning products, automation and renewable energy had helped reduce costs, including a 70 per cent cut in packaging costs for its Pax wardrobe range.

The retailer has also opened seven smaller European stores since January as it moves beyond its traditional out-of-town format.