Swedish furniture giant Ikea has revealed plans to open 17 new stores across America as part of its push to expand its U.S. business, with a focus on entering new markets in the South.
CUPERTINO, CALIFORNIA | NOW THEN DIGITAL — Swedish home goods company Ikea is embarking on a major push to expand its presence in the U.S. by opening 17 new stores over the next three years, with a focus on the South, the company announced on Thursday.
The expansion will include eight full-size stores and nine “Plan & Order” points, which will provide a more intimate shopping experience. The new outlets are expected to create 2,000 jobs, although the company did not disclose the specific locations for the stores.
Multi-phase plan to expand footprint
The expansion forms part of a larger plan to expand Ikea’s footprint in the U.S. over the next decade. Tolga Öncü, head of IKEA Retail, Ingka Group, said in a statement that the U.S. will likely become Ikea’s largest market after the expansion, surpassing Germany.
The company currently has 50 stores in the U.S., but with the additional stores, Ikea aims to capture a greater market share by improving its ability to fulfill and deliver customer orders.
Adapting to American consumers
Ikea is aiming to diversify its global revenue and boost profits by adapting to the needs of American consumers, who have a strong desire for more delivery and pickup options.
More than half of the new U.S. stores will be “Plan & Order” points, smaller outlets that will offer free appointments with the company’s design personnel.
The company will also create 900 new pick-up locations where customers can collect their online orders, a move that could give the business a boost in the U.S., where infrastructure to connect rural and suburban areas to mega stores is lacking, according to Neil Saunders, managing director at data analytics company GlobalData.
Despite the unique challenges that exist in American markets, Ikea has managed to grow, with total sales modestly rising last year despite increased costs and supply challenges, according to the company’s 2022 Annual Summary.
The retailer’s U.S. operations had sales of $5.9 billion last year, with a nearly 19% increase in e-commerce sales.
“We know U.S. customers have a strong desire for more ways to shop and experience IKEA, and this growth plan will allow us to meet that need,” said U.S. CEO and Chief Sustainability Officer Javier Quiñones in a statement.
Ikea’s current US store count stands at 50, and the new stores will form part of a multi-phase plan to expand its footprint in the country over the next decade, according to Tolga Öncü, head of IKEA Retail, Ingka Group.
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