IKEA plans new US stores in $2.2 billion push to challenge Walmart and Wayfair

London, April 20 (BNA): IKEA store owner Ingka Group is spending two billion euros ($2.2 billion) to expand in the United States over the next three years, its largest investment in a single country, in a bet to win over American customers. Other large retailers are closing stores.

Reuters said Sweden’s IKEA, which opened its first US store in 1985 near Philadelphia, is seeking to win market share in the US as cash-strapped consumers look for affordable products.

“In all states across the US, we’re seeing opportunities, but I would say especially in the South, where we’re seeing significant demand that we haven’t yet been able to respond to,” said Tolga Onko, IKEA’s Head of Retail. at Ingka Group.

The company said Thursday that Ingka plans to open eight new large IKEA stores and nine smaller ones as well as upgrade existing stores in the United States, which is IKEA’s second largest market by sales after Germany.

Onko said the exact locations of the warehouses had not yet been determined. The new stores, including nine “plan and order points,” smaller stores where customers can get advice and order furniture for delivery, as well as already-planned IKEA openings in downtown San Francisco and in Arlington, Virginia.

As consumers spend less, big box retailer Walmart and online furniture retailer Wayfair are cutting jobs and closing stores, creating an opportunity for IKEA to buy cheaper store and storage space. Engka said that IKEA’s expansion will create 2,000 jobs.

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“There are sites available that weren’t available before, and there are opportunities for us to accelerate investments in acquiring land and existing sites to bring IKEA closer to many people,” Onkwo said.

The planned stores will increase the number of IKEA locations in the US by about a third, from 51 stores and two “planning and ordering points”. The Ingka Group had revenues of 5.5 billion euros ($6.03 billion) in the United States in its 2022 fiscal year.

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