It has grown from a one-man mailorder business operated in a remote Swedish village to a global phenomenon, revolutionising interior design along the way.

But it appears that Ikea’s progress has stalled for the first time since it was established in the rural parish of Agunnaryd in 1951. Anders Dahlvig, the chief executive of the privately owned group, said yesterday that its trend of rapid growth had been broken. It has cut 5,000 jobs from its 120,000-strong workforce this year.

“We have never had to make such large cutbacks before,” Mr Dahlvig told Dagens Industri, the Swedish business newspaper. “But it is absolutely necessary in order to adjust our costs and our capacity to demand, which is much lower than we had expected.

“The force of the economic downturn has clearly surprised us. This downturn is very much linked to the housing sector, and that makes things worse for our business.”

It is unclear how many jobs have been cut in Britain, where Ikea opened its first store in Manchester in 1987. The group will not release UK performance figures until October.

Martin Hansson, the managing director of Ikea in Britain, had previously played down the impact of the recession on the company. In February he said: “People will stay at home more with friends and families. They will go out less, watch TV. They will still need to sleep.”

Mr Dahlvig said that he expected sales for the year ending August 31 to be €21.5 billion (£18.4 billion), barely 1.5 per cent higher than last year, despite 14 new stores having opened. This represents a like-for-like sales decline — previously unheard of at Ikea.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive