New look stores and better delivery also promised
With its largest investment ever, furniture mogul IKEA has just announced big plans for its expansion into the U.S., with 17 new American stores coming soon.
IKEA’s main franchiser, Ingka Holding BV, just revealed plans for 2 billion euros (2.19 billion USD) to launch a total of 17 new branches across several U.S. locations. The plan will unfold over a course of three years, with the investment also being used to upgrade its network and improve delivery services worldwide.
Inter IKEA Holding BV, which owns the IKEA brand, develops and manufactures its products, reported record annual sales last year. Inter IKEA and Ingka Holding are separate companies.
According to Ingka, The U.S. is just the first of several strategies for expansion over the next 10 years. IKEA acknowledges that America is a crucial market and hopes an increased presence there will lead to greater opportunities and growth in the future.
The move comes at a time when many companies are re-strategizing under continued high inflation and economic uncertainty at an all-time high globally. IKEA is following suit from other European manufacturers with their own retail, such as LEGO and Zara, who have targeted America as the most-steady market for growth.
It just so happens that the demand for IKEA products in America has been high these past 2 years. This was aided by the ‘returning to normal’ of the global supply chain, after recent years of blockages due to the pandemic restrictions and a number of other factors. Economic uncertainty continues to play a key part in almost all company’s affairs currently. IKEA is focused on delivering affordable products and has faith that despite the shaky circumstances of the world right now, now is a good time to double down on investments.
The locations of the new stores were revealed on Thursday and are set to feature 8 physical stores and 9 ‘plan and order points’. This format is relatively new for IKEA and works by customers planning the layout of their room with the assistance of IKEA consultants and then placing orders online.
Currently, in the U.S. there are more than 50 IKEA stores and 2 plan-and-order points, with 2 more due to open in San Francisco and Arlington Virginia, this year. The United States is IKEA’s second-largest market after Germany, after the investment expansion though, it will most likely become the biggest.
Many of the new store openings will be focusing on America’s southern states, where IKEA has its least amount of presence and estimates to create around 2,000 new jobs in the process. The 2 billion euros investment will be the largest in nearly 40 years of IKEA running in the U.S., and, as well as upgrading existing stores, IKEA will increase in-store parcel delivering capacities directly and focus on creating more ‘U.S.’ specific products. The North American expansion follows on from the wave of recent growth in Europe, where IKEA has substantially expanded its reach over the last few years. In truth, the American expansion plan has been planned on paper for some time. Thanks to the recent U.S. Inflation Reduction Act and further economic investment in green energy and electric vehicles, IKEA is now confident that it chose the right time to finally put its plan into action.
Despite the current economic crisis and rising costs of materials and logistics, the IKEA brand has remained steady throughout and last year even recorded record annual sales profits. Expanding its American presence, fine-tuning its products, and evolving its supply chain distribution are now the top priorities for IKEA.
New look stores and better delivery also promised
With its largest investment ever, furniture mogul IKEA has just announced big plans for its expansion into the U.S., with 17 new American stores coming soon.
IKEA’s main franchiser, Ingka Holding BV, just revealed plans for 2 billion euros (2.19 billion USD) to launch a total of 17 new branches across several U.S. locations. The plan will unfold over a course of three years, with the investment also being used to upgrade its network and improve delivery services worldwide.
Inter IKEA Holding BV, which owns the IKEA brand, develops and manufactures its products, reported record annual sales last year. Inter IKEA and Ingka Holding are separate companies.
According to Ingka, The U.S. is just the first of several strategies for expansion over the next 10 years. IKEA acknowledges that America is a crucial market and hopes an increased presence there will lead to greater opportunities and growth in the future.
The move comes at a time when many companies are re-strategizing under continued high inflation and economic uncertainty at an all-time high globally. IKEA is following suit from other European manufacturers with their own retail, such as LEGO and Zara, who have targeted America as the most-steady market for growth.
It just so happens that the demand for IKEA products in America has been high these past 2 years. This was aided by the ‘returning to normal’ of the global supply chain, after recent years of blockages due to the pandemic restrictions and a number of other factors. Economic uncertainty continues to play a key part in almost all company’s affairs currently. IKEA is focused on delivering affordable products and has faith that despite the shaky circumstances of the world right now, now is a good time to double down on investments.
The locations of the new stores were revealed on Thursday and are set to feature 8 physical stores and 9 ‘plan and order points’. This format is relatively new for IKEA and works by customers planning the layout of their room with the assistance of IKEA consultants and then placing orders online.
Currently, in the U.S. there are more than 50 IKEA stores and 2 plan-and-order points, with 2 more due to open in San Francisco and Arlington Virginia, this year. The United States is IKEA’s second-largest market after Germany, after the investment expansion though, it will most likely become the biggest.
Many of the new store openings will be focusing on America’s southern states, where IKEA has its least amount of presence and estimates to create around 2,000 new jobs in the process. The 2 billion euros investment will be the largest in nearly 40 years of IKEA running in the U.S., and, as well as upgrading existing stores, IKEA will increase in-store parcel delivering capacities directly and focus on creating more ‘U.S.’ specific products. The North American expansion follows on from the wave of recent growth in Europe, where IKEA has substantially expanded its reach over the last few years. In truth, the American expansion plan has been planned on paper for some time. Thanks to the recent U.S. Inflation Reduction Act and further economic investment in green energy and electric vehicles, IKEA is now confident that it chose the right time to finally put its plan into action.
Despite the current economic crisis and rising costs of materials and logistics, the IKEA brand has remained steady throughout and last year even recorded record annual sales profits. Expanding its American presence, fine-tuning its products, and evolving its supply chain distribution are now the top priorities for IKEA.
