Online reliant IKEA still planning to open 50 new stores

IKEA plans to open a record number of stores around the world, despite the shift to online shopping during the pandemic.

A trading update from the Swedish furniture giant said it would add 50 new stores to its existing 445 sites, with 30 of these due to open next year.

These include IKEA’s first city centre UK store in Hammersmith, west London, which is due to open in the spring.

The company also reported a four per cent decline in overall global sales to £32 billion over the year to 31 August. This was driven by lockdown enforced store closures across three quarters of its sites.

However, online sales rose 60 per cent during the year and accounted for 18 per cent of total sales – compared to 11 per cent the previous year.

Chief executive Jesper Brodin said that “online saved us” during 2020, preventing what would have been record losses.

He told Bloomberg Markets that while IKEA was pushing ahead with store expansions, a “retail transformation” was also underway, including major digital investments and the roll out of smaller urban stores.

Brodin added that its flagship big-box stores have helped it quickly shift towards a more online focused model, acting as places “which serve home delivery and fulfilment”.

Earlier this year, IKEA launched an e-commerce store on Tmall, Alibaba’s shopping platform, marking the first time the Swedish home furnishings giants has sold its products on a third-party marketplace. The digital shop features around 3,600 IKEA products and home furnishing items.

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