By Marcus Leach

Swedish furniture giants Ikea have reported a 10% increase in profits, largely down to increased demand in emerging markets.

However, the flat-pack furniture firm had to contend with a tough UK retail market as sales grew 6.9% to 24.7bn euros (£20.6bn; $31.9bn) in the year to 31 August, with Russia, China and Poland performing strongly.

Despite a 10.3% rise in profits there was a 3% drop in UK sales.

To combat the sluggish UK retail market, Ikea said it lowered UK product prices by 5% across the home furnishings range compared with the previous year, and added 800 more products for customers to buy online, where sales grew by more than 25%.

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