Ikea thinking smaller
The Canadian Press - Nov 06, 2019 - Biz Releases

Photo: The Canadian Press

Ikea Canada plans to open its first smaller, downtown store format in the country in Toronto within the next two years.

The focus on the new formats for the retailer known for massive stores that can feel like walking through a home furnishings and decor labyrinth comes as urban consumers demand spaces closer to them that don’t require a long drive.

“Customers are changing,” said Michael Ward, who assumed the role as president of the retailer’s Canadian arm at the start of the year after more than three decades with the company.

“We’re moving with customers, and one part of that is that we want to penetrate the big cities.”

In 2018, Ikea announced it planned to add small shops to 30 cities around the world.

The smaller shops come in three different formats.

One of the first opened in Madrid, Spain, in 2018. The city shops focus on different categories, such as bedroom or living room and tend to be roughly 2,500 square metres (27,000 square feet).

In New York City’s Manhattan borough, Ikea took a different approach, focusing on services. The planning studio format is the smallest—about 500 square metres (5,400 square feet).

The last store type—dubbed extra small—spans 5,000 square metres (54,000 square feet).

A typical Canadian Ikea store, by comparison, clocks in at between 25,000 and 35,000 square metres (269,000 to 377,00 square feet).

People are increasingly living in cities and car ownership rates are dropping, Ward said, which makes it more difficult for people to travel to Ikea’s big locations farther outside the downtown core.

He’s careful to stress that doesn’t mean foot traffic to Ikea’s Canadian stores is falling. In its 2019 financial year, there were 31 million visits to its Canadian locations—up 2.7 per cent from the previous year.

But he notes the company’s been missing a way to offer easy access to a physical location for folks living in the city centre.

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