Ikea, one of the biggest furniture chains from Sweden is much loved in the United States. As it turns out this love is very much reciprocated by the CEO of Ikea, Javier Quinones, who plans to add eight giant stores in the US. This expansion plan of $2.2 billion would be Ikea’s biggest investment in the US market, Ikea plans to open these stores and provide over 2,000 jobs over the next three years. Apart from these large-format Ikea stores, Quinones also plans to open nine Plan & Order locations which offer a more intimate shopping experience where shoppers can consult with the company’s design professionals for home projects, interior design, etc. Although Ikea has not yet decided all the new store locations, we are aware that new stores are opening in San Francisco, California and Arlington, Virginia this summer. This expansion plan comes at a time where big-box retailers such as Walmart and online furniture retailers such as Wayfair are shutting down stores and cutting jobs. This allows Ikea to get store and warehouse space at cheaper rates.
Ikea opened its first store in the US in 1985 near Philadelphia and now has 51 stores located across the country, and Quinones strongly believes that there is a lot more room to grow in the US market. Although they see ample opportunities for expansion across the country, Tolga Öncü, the head of Ikea retail at Ingka Group believes that there is major demand in the south of the country which they have not yet been able to respond to. Ikea seems to be aiming at diversifying its global revenue, but to do so it is vital for them to adapt to the needs of American consumers. Hence, a part of Ikea’s business plan is to create 900 new pick-up locations across the country, where customers can collect online orders, making it easier for both them and the customers. They are also working to enhance their delivery services, which would allow them to connect rural and suburban areas to megastores, tie ups with third party outsourcers like Task Rabbit help them to outsource the delivery process and assembly as well.
The US is Ikea’s second biggest market after Germany, so it is safe to conclude that Ikea has been able to adapt well to the challenges of the American market and has grown significantly, with total sales of $5.9 billion last year, which was 19% higher than the year before. As American consumers look for more affordable products in the current economic climate, Ikea’s sales are surely to rise even further this year.
References:
https://www.usatoday.com/story/money/retail/2023/04/20/ikea-opening-new-stores-us/11688192002/