IKEA invests 2B euros to expand its US business

IKEA store proprietor Ingka Group will fund two billion euros ($2.9 billion) in expanding its business in the US over the following three years. It would also be the most significant investment in a single country. It is characteristic of a plan for the Swedish manufacturer to win over American customers while major retailers are shutting stores.

Sweden’s Ikea, which unlocked its first US store in 1985 close to Philadelphia, is striving to gain even more market share in the US at a time when customers with less money can purchase more affordable products, Reuters writes.

Tolga Öncü, the director of Ikea retail at Ingka Group, expressed that they have the potential to expand their business in all parts of the United States. Still, he would say, particularly in the South, where they see a high demand that they have been unable to meet until now.

Ikea announced their plan to open eight large-scale stores and nine smaller ones in the US, the second-highest grossing market for the company behind Germany. They will also be upgrading existing stores in the region.

New jobs

Ikea is expanding its operations with the addition of nine smaller stores located in both downtown San Francisco and Arlington, Virginia. These stores will provide customers with advice and the ability to order furniture for delivery.

Walmart and Wayfair’s cost-cutting measures of job losses and store closures allow Ikea to lease space and warehouses for lower fees.

Ikea’s US expansion should convey 2,000 new jobs, the group said. The planned new stores would raise the number of Ikea locations in the US by approximately a third (currently 51). Ingka Group had a revenue of 5.5 billion euros (8 billion dollars) in the US in the financial year 2022.