Ikea is investing more than $2 billion in the U.S. for growth over the next three years.
The furniture retailer says the money will go toward opening new stores and creating new fulfillment networks. It marks the largest ever U.S. investment from Ikea, and the company’s largest investment in a single country.
Ikea ranks No. 3 in the Europe Database, Digital Commerce 360’s rankings of the largest online retailers in the region.
Ikea plans a variety of store formats
The retailer says it will open eight new stores in the next three years, along with nine locations of its “plan and order” format. These locations are smaller than the retailer’s iconic warehouse, dedicated exclusively to kitchen, living room, and bedroom furniture. Customers treat the smaller stores like showrooms and order pieces, but nothing is actually available to purchase in-store and take home immediately.
The furniture retailer says it will also open 900 pickup locations in the U.S. in the next three years, some of which will be attached to larger stores. Ikea plans to hire 2,000 additional U.S. workers to staff these locations. The furniture company did not specify where these new locations would be in the U.S.
“It is in all the states across the U.S. where we see opportunities, but I would say in particular the South, where we see big demand that we have not so far been able to respond to,” head of Ikea Retail Tolga Öncü, told Reuters.
As of April 2023, Ikea has 51 U.S. stores. In 2022, the retailer opened 15 pickup locations and two plan and order stores. Ikea also has San Francisco and Arlington, Virginia locations planned for summer 2023.
The U.S. is a major growth opportunity
Ikea expects the U.S. to surpass Germany as its largest sales market in the near future, Öncü, told the Financial Times.
“The U.S. is one of our most important markets, and we see endless opportunities to grow there and get closer to the many Americans with affordable products and services,” Öncü said in a press release.
Ikea’s U.S. sales for fiscal 2022 reached $5.9 billion, according to the company’s annual report. This was equal to fiscal 2021 U.S. sales, but ecommerce sales were up nearly 19% in 2022.
The retailer says these new locations will make its budget furniture accessible to more American shoppers. ” Our priority is to become more accessible, while staying as affordable as possible for the many people, which is especially important given the increasing costs of living.” CEO & Chief Sustainability Officer at Ikea US Javier Quiñones said in a statement.
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