London (AFP) – Swedish furniture giant IKEA on Thursday opened a new store in the heart of London’s shopping district, with a flurry of balloons, flags, and giant meatballs. The Oxford Street outlet has been seven years in the making and is part of the retailer’s strategy of bringing the global brand closer to city centres.
Tolga Oncu, retail manager at Ingka Group, the holding company which controls most of IKEA’s stores, said they were encouraged by the “urban formats”. Others already exist in places such as Paris, Stockholm, Vienna, and Tokyo. “We know the fact that when we are physically present, not only our physical retail improves but also our digital retail improves,” said Oncu.
The 4,600-square-metre (nearly 50,000 square-feet) store is housed in the former Topshop building, which the company bought in 2021 for £378 million ($503 million). Hundreds of people thronged the aisles on Thursday to deafening music by a DJ, with attendance boosted by unusually summery temperatures in the British capital. Some shoppers held Swedish and UK flags as they posed for photos with a giant meatball, while others browsed the store, which it is hoped will help regenerate Oxford Street after the closure of several big-name outlets.
With total sales of 45 billion euros ($51 billion), Ikea, founded in 1943 by Ingvar Kamprad, is keeping its focus on physical stores despite the boom in online shopping. In 2023-24, online accounted for 26 percent of the company’s turnover compared to just seven percent five years ago. The UK is IKEA’s fourth-biggest market, behind Germany, the United States, and France.
Oncu said Brexit — Britain’s tortuous departure from the European Union in 2020 — “hasn’t made a difference,” but he mentioned that the company was “closely monitoring” the trade war launched by US President Donald Trump. “We have a global footprint where a lot of our production comes from Europe,” he said. “Then, of course, like everyone else, we are also looking for opportunities across the world.”
IKEA has been looking at more local production for a number of years, particularly in the United States, notably to avoid exporting bulky items from Europe. He added, “Depending on what the conclusions will be, we will have to look at whether we are still having a set-up that is the best for us to keep our prices as low as possible.”
© 2024 AFP
