IKEA Investing Over $3B in International Stores

FRIDAY, MAY 20, 2022


Ingka Group, the largest IKEA retailer, recently announced that it would be accelerating expansion to make IKEA more accessible to customers.

In a press release, the company announced plans to invest more than 3 billion euros (about $3.2 billion) in new and existing stores by the end of next year.

“More than ever before, we want to optimize our network of stores in order to cater for an inspiring shopping experience – no matter how or where our customers choose to engage with us. With this investment we aim to secure the long-term viability of our business by making IKEA more accessible, more affordable and more sustainable,” said Tolga Öncü, Retail Operations Manager, Ingka Group.

According to the company, life at home has never been more important. This, in addition to IKEA’s ongoing retail transformation and navigating global disruptions, have all been contributors to Ingka Group’s decision to further invest in the retailer’s business model. Since September 2021, the company has opened 16 new IKEA touchpoints of varying sizes, with plans to open more.

With the latest investment announcement, IKEA reports that it will build new physical stores and revamp existing facilities to provide a more immersive IKEA experience and to further support the increasing demand for home deliveries. In Kuopio, Finland, IKEA recently rebuilt a facility to fulfil online orders. According to the company, the store has reduced the cost of delivery for pick-up parcels by 40%.

“Our stores remain one of our biggest strengths and we will continue to transform them to meet the needs of our customers for generations to come. We see many of our stores playing a dual role, giving our customers the best of both physical and online retailing and the investment will support not only an inspiring in-store IKEA experience but also a faster and more affordable shipping of online orders directly from our stores,” said Öncü.

In other parts of the world, IKEA is also planning to build new stores in Stockholm and Toronto. The locations are slated to house more than 2,000 products for immediate takeaway and larger furniture items available for home delivery. Also in Canada, the company will construct a new distribution center in Quebec and a planning studio in Montreal.

1.2 billion euros are slated to be invested in London, where IKEA intends to revamp its Oxford Street store, new services, and build a new distribution center in Dartford capable of completing home deliveries within 24 hours across the capital.

In Madrid, IKEA is planning its third city store.

“Even in our more mature markets, like Germany or Spain, we will continue investing because we still see good potential to expand our business and help even more people create a better everyday life. Regardless of the size of the physical touchpoint, customers can always expect to get the same home furnishing expertise and inspiration they love about IKEA,” added Öncü.

Just days after announcing the expansion plans, IKEA announced that its first “blue box” store had opened in Nice. The opening was symbolically marked with a ceremony in the presence of Walter Kadnar, CEO of IKEA France, Patrick Cazorla, Store Manager, Jesper Brodin, CEO of Ingka Group, H.E. Håkan Åkesson, Ambassador of Sweden in France and other dignitaries.

The store is the 36th to open in France and is more than 24,000 square meters in size. The facility has 51 inspirational room settings that reflect IKEA’s findings into how people on the French riviera live and what are their main home furnishing needs.

According to reports, the new store incorporated several sustainability features, including locally planted species on the roof as well as solar panels that will produce 40% of the store’s energy needs.

Over the past three fiscal years (2019-2021), Ingka Group invested more than 2.1 billion euros in existing and new stores across its 32 markets.

   

Tagged categories: Asia Pacific; EMEA (Europe, Middle East and Africa); Latin America; Maintenance + Renovation; Maintenance programs; North America; Ongoing projects; Program/Project Management; Project Management; Projects - Commercial; Renovation; Retail; Retail; Upcoming projects; Z-Continents

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