Ikea UK chief Peter Jelkeby admits the retailer could become more accessible as shopping habits change. Photo: Geoff Pugh
British The head of Ikea has vowed to continue opening small stores in the city center to attract a new generation of shoppers after the closure of the Tottenham megastore.
Peter Jelkeby, Ikea UK and UK Representative; Ireland's chief executive says the Swedish furniture retailer plans to open more high street stores to stay relevant as shopping habits change.
“We're not moving away [from megastores],” says Jelkeby. “But we recognize we can be more accessible.”
His comments come after the retailer, which has 21 stores across the UK, closed its huge megastore in Tottenham, North London, last year.
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The closure marked only the second time a “big box” has closed. store in the UK and comes 17 years after the opening of the Tottenham branch caused a stir with 1,000 cars queuing on the day it opened.
Ikea blamed the decision to close the North London branch on “changes in shopping behaviour” . The pandemic accelerated the shift to online furniture ordering, which has continued even after restrictions were lifted.
“We were slow at first,” Jelkeby says of the move to online ordering, “but I think we’ve picked up the pace.”< /p> 
Jelkeby says the retail giant is not leaving megastores. Photo: Jeff Pugh
More than a third of Ikea's sales last year were made online, up from just under a fifth in 2019.
< p>Changing shopping habits have forced Ikea to rethink its business model. Ikea has long been synonymous with large out-of-town stores where customers come and pick up prepackaged furniture the same day.
However, the rapid growth of online orders means there are fewer disputes. for running huge stores, with all the associated costs.
Instead, the Swedish retailer is experimenting with new city center stores that look more like showrooms than warehouses. Customers can browse products and then buy them online instead of sticking them in the trunk of their car that same day.
Ikea opened its first mini store in Hammersmith, West London, in 2022 in a shopping center. The branch is a short walk from the subway and is about a quarter the size of traditional blue box out-of-town stores.
Jelkeby says other downtown branches will follow, but the numbers are not there. on how many Ikea eventually plans to open.
Ikea opened a site at Kings Mall in Hammersmith in 2022 as part of a new foray into convenience. Photo: Ikea handout
Ikea is “testing and piloting” ways to modernize its business, he says. Central to its plans is the opening of a new store on Oxford Street.
Next year the retailer will open a branch on the site of collapsed Topshop's former flagship in Oxford Circus. Ikea paid £378 million for the three-storey building in 2021.
The new central London outpost was planned to open this autumn but was recently delayed until the second half of 2024 due to construction problems.
“It’s an old building, there’s a lot to discover here,” says Jelkeby. “If that means it takes a little longer to get it into that shape, fine.”
When it opens, the new store will have “more inspiration, more interaction, more digital stuff” – he said. speaks. Food and hospitality will be the focus, which means Ikea's iconic meatballs will be on offer.
While shoppers will still be able to take small items with them, Jelkeby expects most of the business will be done online – after all, there is little parking around Oxford Street.
“They can go ahead and open showroom, you can go and touch and feel that you can still test the sofa… and then you can go home and order it,” says Jelkeby.
“If you want to be relevant on Oxford Street , a lot of it is about understanding that the customer who comes in is shopping differently than before.”
In May, Ikea opened a 452,000-square-foot distribution center. ft in Dartford, Kent, which will allow the company to deliver furniture to Londoners within 24 hours of placing orders online.
Jelkeby hopes the approach will help Ikea win. business with clients from the inner city who do not have cars. This could be an example of how a company can expand its operations in other cities.
Ikea's move to Oxford Street comes at a time when the area's future as a retail destination looks unusually shaky.
Oxford Street has been hit by high levels of vacancy, rising crime and an influx of American-style bakery shops that have displaced this area is from the market.
Signs & Spencer's Sacha Berendji wrote in The Telegraph that what was once “the jewel in London's shopping crown” now consisted of “empty shops, litter-strewn streets and fewer visitors”.
Jelkeby says that he still “believes” in Oxford Street. : “I think it’s important to keep the high street alive.”
The 60-year-old has worked at Ikea for most of his adult life, after initially working as a weekend worker as a youth.
He was a buyer for Ikea worldwide, with postings in Moscow. , Hong Kong and Vietnam before finally moving to the UK, where he rose to the position of deputy regional manager.
Jelkeby left for ten years to run Swedish homewares chain Clas Ohlson, but returned in 2019. to take on the role of CEO in the UK and Ireland. The father-of-three now lives in Notting Hill, west London, and only comes to the retailer's head office above its Wembley megastore eight days a month.
He said working from home is good for your health. Ikea: “During Covid, everyone wanted a desk or a home office, and that continued.”
A fixture of Britain since the late 1980s, Ikea is known for its low prices thanks to its DIY products . approach to home improvement. Its flat-pack products are assembled at home by customers, saving on shipping and assembly costs.
However, that model is under threat from both the shift to online ordering and rising inflation. Last October, RetailWeek reported that prices on some Ikea products had jumped 80% in a year.
Ikea blames rising prices on everything from raw materials to wages.
“We don't hedged against inflation,” says Jelkeby, although he believes costs are now “moving in the right direction.”
He hopes to reduce prices “where we can.” Although many things change at Ikea, the emphasis on good value for money remains.
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