IKEA's $2 Billion Investment in U.S. Market to Include Opening Eight New Stores and Multichannel Expansion

IKEA's $2 Billion Investment in U.S. Market to Include Opening Eight New Stores and Multichannel Expansion

April 20, 2023 : Swedish furniture chain, IKEA, has announced its biggest-ever investment in the U.S. market, with plans to open eight new stores and expand its omnichannel fulfilment network. IKEA will open large-format stores across the U.S., including nine Plan & Order locations where shoppers can seek advice for complex projects such as kitchen or bathroom installations. The company will also create 900 new pickup locations for online orders. The company will invest $2.2 billion in its U.S. omnichannel growth strategy over the next three years.

Javier Quinones, CEO and Chief Sustainability Officer at IKEA US, says the U.S. is a prioritised market and a mature market at the forefront of retail innovation. Quinones said, “We believe it is the right time to invest and get closer to many more Americans, which is what this investment tries to do.” IKEA’s cautious approach to store openings over the past 38 years in the U.S. has given the company confidence that there is still room for growth, Quinones added.

IKEA’s U.S. investment will add over 2,000 jobs, with physical stores and online offerings working together seamlessly. Quinones expects store and online sales to be roughly 50-50 but added that “more and more it’s less important where it [shopping] happens”. The company reported $5.9 billion in sales in fiscal 2022, with 69 million store visitors and 494 million online visits.

IKEA’s U.S. investment will include continued support for the company’s clean energy, circular economy and fair housing advocacy efforts. IKEA’s U.S. investment will continue supporting the company’s efforts in clean energy with initiatives such as electric delivery vans; the circular economy with sustainably produced products, resale and buy-back options; and fair housing advocacy.

The move bucks the trend among other big retailers, as analysts at investment bank UBS predicted that home furnishing stores would be one of the sectors hit hardest by a wave of store closings that UBS expects to occur between now and the end of 2027. UBS forecasted that 4,000 home furnishing stores could be among more than 50,000 expected store closings in coming years because of tightening credit and consumer spending shifts.