IKEA’s first-ever high street store in Britain is now open and anchored on its first inner-city mall. The furniture retail giant announced a £1 billion ($1.4 bln) investment for three years.
Known for its out-of-town warehouse stores, IKEA is working on a strategy shift to smaller locations within cities. They are also adapting by offering more digital services and products in response to changing shopping habits.
The Ingka Group, owner of most IKEA stores worldwide and store-anchored shopping centers across Europe, Russia, and China, opened the first inner-city store in Paris in 2019.
Ingka Group is looking into investing in existing and new stores in London, as well as distribution and delivery services, and pilot trials, the group said on Thursday at the inauguration of their Hammersmith location.
“Using London as a test-bed for innovation, the retailer will trial and develop new formats and initiatives,” Ingka Group wrote in a statement.
The next inner-city IKEA store in London will open in Autumn of 2023 on Oxford Circus. Ingka Group had bought an iconic building in the location in 2021.
Cindy Andersen of the Ingka Centres malls subsidiary said that the Hammersmith location was now fully leased, vastly different from the 25% vacancy when Ingka purchased the building in 2019. This showed defiance in the commercial property market downturn.
Ingka Group calls its malls a “meeting place,” and Andersen predicted that the redeveloped mall would double its annual footfall to 6 million compared to its 2019 figures.
Andersen explained, “Fundamentally, our belief is still that people want to be with other people, to experience exciting spaces, to gather.” She added that they aimed to create a space that people would visit every day and not just once a week.
Ingka Centres’ is set to open its second inner-city mall in San Francisco after it bought an ailing mall in the city in 2020 amid the depressed retail markets as a result of the pandemic.
Ingka Group’s malls and IKEA stores are on the way to a good recovery from the effects of the pandemic. Andersen told Reuters that in the festive period November-December, tenant sales increased to 25% globally compared to the figures from the year earlier. It also saw a rise to 1.3 billion from the 8% in 2019, pre-pandemic.
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