Ikea's city centre shops are not proving to be successful: in Norway, the Swedish chain is closing three such locations as profits are falling and cost cutting measures are necessary.
Exit city stores, enter e-commerce
Ikea opened smaller shops in the inner cities of Oslo, Ålesund and Tromsø in 2015 and 2016: they were a test - for the rest of the world as well – and were meant to serve as service and collection points. This test proved to be unsuccessful and led to the announcement that the interior chain is closing the three stores. Instead of smaller city stores, the Swedish retailer wants to focus more on e-commerce, offering a wider range of products and faster delivery of online orders. A shop would then no longer be necessary as it is only an intermediate step.
This way, Ikea wants to reduce costs in Norway by 10 % as profits are falling and the retailer of flat pack furniture is on a three-year quest to renew itself. The staff of the three closing stores can work in other branches.
Ikea still has city stores elsewhere, including in Hamburg. At the beginning of this year, the retailer announced its intension to open more branches in city centres. It is looking for locations in Copenhagen, London and Paris, among others. From 2019 onwards, the Ikea range should be increasingly accessible to people living in the city without a car.