IKEA opened its first-ever high street store in Britain and anchored this on its first inner-city mall. The furniture retail company announced that a £1 billion ($1.4 bln) investment is set for London in the next three years.
Strategically shifting to smaller locations within cities, IKEA is adapting from its usual out-of-town warehouse stores. In response to people’s shopping habits, digital services and products are also now part of the company’s offerings.
In 2019, Ingka Group opened the first inner-city store in Paris. The group owns most IKEA stores worldwide and IKEA store-anchored shopping malls across Europe, Russia, and China.
Existing and new stores in London, distribution and delivery services, and pilot trials are part of Ingka Group’s plans for investment, announced at the inauguration of their Hammersmith mall on Thursday.
“Using London as a test-bed for innovation, the retailer will trial and develop new formats and initiatives,” the company said in a statement.
Oxford Circus will feature the next inner-city IKEA store in London. It will open by Autumn of 2023, following Ingka Group’s purchase of an iconic building in the area in 2021.
The subsidiary Ingka Centres head Cindy Andersen also said that the Hammersmith mall was now fully let compared to the 25% vacancy in 2019 when Ingka first bought the building, defying the commercial property market downturn.
“Meeting place” is an apt nickname for Ingka Group’s malls as Andersen predicted that the redeveloped mall’s annual footfall would double to 6 million, largely different from its 2019 figures.
“Fundamentally, our belief is still that people want to be with other people, to experience exciting spaces, to gather,” Andersen explained. She added that the goal was to build a space that people would visit every day and not just once a week.
The second inner-city mall of Ingka Centres is set to open in San Francisco following the subsidiary’s purchase of an old mall in 2020 despite the depressed retail markets resulting from the impact of the pandemic.
A good recovery from the effects of the pandemic is on the way for Ingka Group’s malls and IKEA stores. In the festive period November-December, Andersen said that tenant sales rose to 25% globally compared to the figures from the previous year. A rise of 1.3 billion from the 8% in pre-pandemic 2019 was also recorded.