- Ikea plans to invest $2.2 billion in its largest-ever US expansion.
- The furniture retailer will open eight new stores and nine smaller locations over three years.
- Ikea's expansion comes as other big-box retailers are cutting jobs or closing stores.
Ikea is spending over $2 billion to expand its US presence and lure frugal shoppers.
The Swedish furniture retailer announced plans to open eight new stores and nine new "plan-and-order points," smaller locations where customers can design kitchens, bathrooms, and living rooms and select furnishings. Ikea will also upgrade its existing US stores and add 900 customer pick-up locations nationwide as part of a three-year plan.
Ikea entered the US in 1985, and this latest investment is the brand's largest in its nearly 40-year history in the US. The new stores and pick-up locations will create around 2,000 jobs, the company said.
The company hasn't decided where the new stores will be, Tolga Öncü, head of Ikea retail, told Reuters. But the company sees a major opportunity in the American South, "where we see big demand that we have not so far been able to respond to," Öncü said.
The investment comes at a time when other big-box retailers, including Bed Bath & Beyond and Walmart, are closing locations across the country. The motives behind these closures vary: Some retailers are navigating bankruptcy, while others are looking to cut costs and adapt to changing shopping behavior that's been affected by both the pandemic and months of high inflation. Best Buy, for example, is closing 20 to 30 of its large-format stores and opening smaller locations and outlet stores to appeal to "value-focused" shoppers, the company said earlier this year.
Meanwhile, Ikea's reputation for affordable furniture and housewares has helped drive US sales, which topped $5.9 billion last year. Ikea's US CEO, Javier Quiñones, hyped the retailer's commitment to low prices in the announcement of its expansion.
"Our priority is to become more accessible, while staying as affordable as possible for the many people, which is especially important given the increasing costs of living," he said in a statement.