1. News
November 22, 2018

Ikea stores operator Ingka announces business transformation plan

Ingka Group, which owns and operates most Ikea stores, has announced a business transformation plan to put greater focus on adding value to its customers.

Ingka Group, which owns and operates most Ikea stores, has announced a business transformation plan to put greater focus on adding value to its customers.

The plan is expected to create 11,500 new jobs worldwide in the coming two years, through an opening of around 30 new smaller-format stores, investments in its fulfilment network and digital capabilities. Simultaneously, 7,500 jobs are likely to be eliminated out of the total 160,000 employees in 30 markets.

Ingka Group CEO Jesper Brodin said: “We continue to grow and perform strongly. At the same time, we recognise that the retail landscape is transforming at a scale and pace we’ve never seen before. As customer behaviours change rapidly, we are investing in and developing our business to meet their needs in better and new ways.

“As customer behaviours change rapidly, we are investing in and developing our business to meet their needs in better and new ways.”

“We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and values. Our values guide our work and build our inclusive, open and honest culture. It’s all based on a spirit of togetherness and enthusiasm and we will continue to transform with that spirit.”

The UK and Ireland markets will continue to see significant investments being made. This year, two new Ikea stores opened, in Sheffield and Exeter.

It also opened its new Planning Studio on Tottenham Court Road, which is the initial initiative in its City Centre Approach, beginning with London.

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Besides opening new stores, Ikea has invested significantly in distribution and fulfilment network with two new Customer Delivery Centres and a Parcel Unit in London.

Ikea Greenwich will open in spring 2019, which will lead to the creation of 500 new jobs. Under the next phase of the business transformation plan, 350 jobs are expected to be cut out the 12,100 roles in the UK and Ireland during the next two years.

Ikea UK and Ireland country retail manager Javier Quinones said: “We have been in the UK and Ireland for more than 30 years and IKEA has revolutionised the way people live, and the way people shop. Today it is hard to imagine a home without an IKEA product. However, we are in a fast-changing retail environment and while we continue to grow, we are evaluating how we can remain relevant in the eyes of consumers – now and in the future. We recently announced our City Centre Approach starting with London and we will continue to invest in being more convenient through our enhanced service offer and digitalisation.

“While the opportunities ahead of us are exciting, we know that some of the changes won’t always be easy and in some cases, we will have to make difficult decisions.”

In markets such as India, the company is on an expansion spree. In August, it opened its first India store out of the 25 planned, in Hyderabad. The retailer plans to open its second bricks-and-mortar store in Mumbai next year and will also launch its online store in the city. It plans to open 25 stores in the Indian market. In the US, the retailer plans to eliminate fewer than 75 jobs.

Meanwhile, Ikea plans to invest $133m to open its largest store in the world and the first in the Philippines.

Ikea Southeast Asia, the franchise, will initially invest the amount in building up its stock and establishing operations.

The 65,000m² outlet in Manila will open by 2020 and will accommodate a large warehouse, online facility and integrated call centre.

The retailer is planning to expand its footprint in Asia. Last week, the retailer opened its first city-centre store in Tokyo, Japan and is also planning to foray into Vietnam.