UK furniture market will be shaken to core by Ikea's small store offensive

Furniture giant Ikea has developed a small store format that will enable the retailer to break down the planning brick wall that has stymied its UK expansion.

Ikea has secured a site at the Denbigh Stadium development project in Milton Keynes and has identified a further eight suitable locations.

'We have spent the past year creating an Ikea store that operates on a smaller footprint,' said Ikea UK boss Peter Hogsted. 'We hope we can use this new format to really start our expansion and open eight to 10 stores over the next three years.'

Last year, the Swedish powerhouse crashed through the£1 billion sales barrier and Hogsted said the pace continued into the new year with double-digit increases. However, the 12-strong chain's growth has been fettered by inability to find locations that meet its and planners' criteria.

Ikea's new format is a response to what Hogsted describes as a Catch-22. 'We can't go on discussing and waiting,' he said. 'We really need to operate more stores in this country.

'It is not about winning or losing, but realising the planning regime is as it is. There is little understanding or support for furniture retailers like Ikea in the UK.'.

Ikea has been desperate to expand in order to alleviate pressure on over-stretched stores. Hogsted said the format would still be 'Ikea as we know it', but involved compromises on range presentation and office space.

The backbone is an 'innovative' space-saving logistics approach that will form the basis of a global test for the retailer.

In tandem with the expansion, Ikea is also launching a recruitment drive for 150 new managers.

'This gives us the potential to double the UK business,' said Hogsted. 'We can have at least 25 stores as we see it.'

An unchecked Ikea promises to shake up a troubled furniture sector, dented by the collapse of Courts. Verdict senior retail analyst Gavin Rothwell said Ikea's expansion would enable it to usurp MFI's market leadership.

MFI commands 7 per cent of the£12.6 billion furniture market, compared with Ikea's 5 per cent.


The decision to develop smaller stores coincides with the opening of Ikea's first store in the UK for five years go unnoticed. The 333,000 sq ft (30,000 sq m) shop in Edmonton - the retailer's fourth London store - is the largest in the UK. It will open at the stroke of midnight on Thursday, February 10, with the retailer's traditional log chopping ceremony.

It will then trade solidly for the next 24 hours, with a programme of timed offers running throughout the night to prevent the predicted logjam on the North Circular. Opening specials include a three-seat leather sofa for£45 and a bedstead for£30.