Ingka makes $3B bet on Ikea stores

This artist’s rendering shows what the new 6X6 building in San Francisco might look like when redesigned to house Ikea as an anchor store along with other mixed use offerings.

DELFT, The Netherlands — Ingka Group, the largest stakeholder in Top 100 retailer Ikea, announced that it is accelerating expansion by investing more than 3 billion euros ($3.159 billion) in new and existing stores by the end of next year.

Officials say the reasoning is to become more accessible for customers whenever and wherever they want to interact with Ikea. As online shopping continues to increase rapidly, physical Ikea stores remain an essential part of the retailer’s business model; since September last year, 16 new Ikea touchpoints have already opened and more are planned.

“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,” said Tolga Öncü, retail operations manager for Ingka Group. “With this investment we aim to secure the long-term viability of our business by making Ikea more accessible, more affordable and more sustainable.”

The company will focus its expansion investments in new physical stores as well as in revamping existing ones for a more immersive Ikea experience and to further support the increasing demand for home deliveries.

“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.

Ikea will soon open stores in Stockholm and Toronto in downtown locations, with more than 2,000 products for immediate takeaway and larger furniture items available for home delivery. An expansion plan for Canada includes the opening of a new distribution center in Quebec and a planning studio in Montreal.

“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,” said Öncü.

Over the past three fiscal years (FY19-21), Ingka Group invested more than 2.1 billion euros in existing and new stores across its 32 markets.

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