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Ikea to bring flatpack furniture to the high street

10/01/2006

Swedish home furnishings giant Ikea has announced a billion-pound UK expansion which will see it open ten city centre stores by 2009.

Ikea has achieved enormous success worldwide by operating large warehouse-style out-of-town outlets and has previously shied away from high street operations due to the limited storage space and high rental costs involved.

However, in a bid to secure an increased share of the UK furnishings market, the Swedish firm has decided on a change of direction, with the first of its high street outlets due to open in Coventry next year.

Peter Hogsted, head of Ikea UK, revealed the plans to the Daily Telegraph, suggesting that UK planning restrictions had ruled out a further expansion of out-of-town outlets.

"The only way we can expand in the UK is close to city centres and we have decided to do that," he said.

"Our preferred location is outside cities but we have realised that we need to comply with UK planning requirements. We have found a model to let us expand in the UK."

The new stores are expected to be less than half the size of Ikea's existing 14 UK stores, with floor space in the region of 15,000 sq m.

However, he warned that the additional storage and rental costs of operating smaller stores would almost inevitably result in price rises across the board.

Apart from the confirmed opening in Coventry, the locations of the other nine planned high-street stores have yet to be disclosed.

In another new departure for the furniture giant, which has built its success on a self-service retail model epitomised by its pioneering use of flatpack self-assembly products, Mr Hogsted also revealed that the retailer was planning to launch a pilot online delivery service in a number of UK postcodes.

"We will test it very softly in the summer and autumn and then full-scale later this year or early next year. It is a way to be more accessible for our customers," he said.

The UK is one of Ikea's key global markets, accounting for 11 per cent of its €14.8 billion (£10.1 billion) worth of worldwide sales last year.

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