IKEA targeting central Paris expansion

The biggest retailer globally, IKEA, is due to invest €600m to renovate two and open seven new stores in France by 2017.

This move will create 1300 jobs and boost the suffering economy.

The group, well-known for its distinctive furniture and massive out-of-town stores, is giving due consideration to opening a shop within central Paris, with pick-up points to collect goods in response to the changing consumer shopping style.

IKEA announced during June that it was due to open a pilot store in Hamburg, in north German, in a pedestrian shopping zone.  

Their shift of focus could be due to out-of-town stores being affected globally by the high fuel prices and the trend for shoppers buying in smaller quantities, but making more frequent visits to stores, as has been seen in the grocery market.

IKEA’s announcement will no doubt be welcomed by the French Socialist government as it struggles with high unemployment figures and a decline in consumer spending.  

The expansion plan for France is a huge move from the €100m due to be spent this year on the opening of a store in Clermon-Ferrand in Central France, the renovation of a store in Lomme in the North and the €500m that was spent during the past five years.

This comes as part of the group’s plans to increase the number of stores within France to 40 by 2020.  It currently has 30 stores within the country.

France accounts for about 10% of the group’s sales, and fills the slot after the US and Germany.  It is the top furniture retailer within France, employs 9700 people and offers stiff competition for its competitors, But and Conforama. Its store traffic increased by 2%, but like-for-like, year-on-year sales remained flat during fiscal 2013/14 at €2.39bn.

The French furniture market saw a decline of 2.5% during the first six months of 2014, due to increased unemployment and a sluggish real estate market.

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