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Ikea Responds To Evolving Shopping Patterns By Bringing Smaller Stores To More City Centers

Some Ikea shoppers may soon be able to shop the Swedish furniture giant closer to home as the company invests billions in opening stores in urban centers. 

As of August, there were more than 450 Ikea stores worldwide, according to Statista.

Over the next year and a half, Ikea plans to transition 30%-40% of its existing big-box suburban locations to distribution centers for online orders, while opening new, smaller stores to accommodate in-person shopping. The move — which The Wall Street Journal reports is expected to cost about $3.16B — is intended to align with evolving shopping habits.

Repurposing existing stores for fulfillment purposes has led to reduced shipping times and costs in countries like Finland, where the practice has already been implemented, per the WSJ. The move could quell some of the recent criticism by Ikea shoppers complaining of price hikes and out-of-stock items. In late December, Ikea said it raised the price of its flat-pack furniture by up to 50% due to supply chain challenges, according to the Guardian. 

Tolga Öncü, retail-operations manager for Ingka Holding BV, the largest owner and operator of Ikea stores, declined to tell the WSJ how many new stores the company will open; however, he said urban centers in London, Stockholm and Toronto are among the planned locations.

Ikea has experimented with smaller format stores before, opening its first-ever scaled-back urban store on Tottenham Court Road in London in 2018. A year later, it opened its first U.S. small concept store in Manhattan.

Related Topics: IKEA, Tolga Öncü, Ingka Holding BV