Ikea Challenges Walmart, Wayfair With $2.2 B Investment in Expanding US Presence — Retail Bum

IKEA’s owner Ingka Group plans to spend $2.2 billion on expanding its presence in the U.S. over the next three years, positioning the furniture retailer to capture a larger share of the U.S. market as other big box retailers fold their tents.

The company will open eight new full-sized IKEA store locations and nine smaller stores and invest in upgrading its existing stores across the U.S.

The new store locations will add to IKEA’s existing footprint of 51 store locations, which includes two “plan and order point” smaller stores. The company is currently also working on opening two locations in Arlington, Virginia and San Francisco, California, according to Reuters.

“It is in all the states across the U.S. where we see opportunities, but I would say in particular the South, where we see big demand that we have not so far been able to respond to,” said Tolga Öncü, head of IKEA Retail at Ingka Group.

Öncü added that the exact store locations are yet to be decided.

The company’s expansion efforts are aimed at catapulting IKEA’s expansion in the U.S., where players such as Walmart and Wayfair are cutting jobs and shutting stores, creating an opportunity for IKEA to secure cheaper real estate and warehouse deals.

“There are locations available that have not been available before, there are opportunities for us to speed up investments in acquiring land and existing locations to bring IKEA closer to the many people,” Öncü said.

The U.S. is IKEA’s second-biggest market in terms of sales after Germany.

Originally published at https://retailbum.com on April 20, 2023.