Ingka Group, the owner of IKEA stores, plans to invest $2.2 billion in the United States over the next three years, marking its most significant investment in a single country. The expansion aims to attract American customers as other major retailers shutter their doors.
IKEA, based in Sweden, opened its first US store in 1985 near Philadelphia and is now looking to increase its market share as budget-conscious consumers seek more affordable options.
Tolga Öncü, Head of IKEA Retail at Ingka Group, said, "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."
The company plans to open eight new large IKEA stores and nine smaller stores, while also upgrading existing stores in the US, which is IKEA's second-largest market by sales after Germany. Specific locations for the stores have yet to be determined.
The new stores will include nine "plan and order points," smaller locations where customers can receive advice and order furniture for delivery. These new stores are in addition to the already planned IKEA openings in downtown San Francisco and Arlington, Virginia.
As consumers cut spending, major retailers like Walmart and online furniture retailer Wayfair are laying off employees and closing stores, providing an opportunity for IKEA to acquire more affordable store and warehouse spaces. Ingka anticipates that the IKEA expansion will create 2,000 jobs.
"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 stated.
The planned stores would increase the number of IKEA locations in the US by approximately one-third, from 51 stores and two "plan and order points." Ingka Group reported revenues of €5.5 billion ($6.03 billion) in the US during its 2022 financial year.
