IKEA set to expand across Russia

IKEA, the Swedish retailer, is looking to expand its presence across the regions of Russia.

In 2014, IKEA set out plans to resume growth of its Russian shopping centre network, committing around €2 billion through 2020 after a period of consolidation. The programme positioned its MEGA malls as the vehicle for re-entering an expansion phase the retailer had paused earlier in the decade.

At the time IKEA operated 14 MEGA centres, located on the edges of Russia’s largest cities. The plan centred on a new 215,000 sqm mall in Mytishchi, northeast of Moscow, targeted for 2018, with further centres proposed for Krasnoyarsk, Perm, Voronezh and St Petersburg, according to the head of IKEA Shopping Centres Russia, Armin Mikaeli.

The move marked a shift after IKEA had slowed new openings to concentrate on existing stores, having frozen Russian investment in 2011. The retailer cited bureaucratic obstacles in some regions and concerns over corruption among the reasons for that pause, and said conditions had since improved enough to justify a review.

IKEA reported more than 270 million visits to its Russian centres over the prior year and a 6% rise in sales. Analysts at Infoline noted that MEGA had gained footfall while some other operators were losing it, which IKEA framed as resilience heading into a slower phase of Russian growth.