IKEA Canada sales up 5.9%
BURLINGTON, Ontario – IKEA Canada had sales of $2.17 billion for its most recent fiscal year, an increase of 5.9% over the previous year, according to its recently published summary report which also noted revenue for the home furnishings giant has jumped 33.5% over the past three years.
It is a wholly-owned subsidiary of the IKEA Group. Headquartered in the Netherlands, the parent company is the largest home furnishing retailer in the world and recently reported world-wide sales of C$49.9 billion (€34.1 billion) for the fiscal year ending August 31, 2017. IKEA Canada accounted for 4.3% of total revenue in fiscal 2017, which is slightly higher than its historic average.
In a statement, the company described its latest fiscal year as successful while continuing to advance “its coast-to-coast expansion plan to double in size by 2025…cementing its position as leader in life at home, IKEA held the number one market share place in the furniture category for the fourth year in a row, increasing by 0.2% to 9.6%”
However, it didn’t break down its overall sales by product category although Statistics Canada has classified IKEA Canada as a furniture store, which means at least 51% of its annual revenue are from sales of furniture and mattresses. Statistics Canada figures show furniture store sales for the trailing 12 months ending August 31 were $11.4 billion, giving IKEA a market share in that retail sector of roughly 19%. This is a solid second behind Leon’s Furniture Limited – the Toronto-based parent of Leon’s and The Brick – whose market share is estimated at 22.8% based on performance during the 2016 calendar year.
“I am pleased to share another strong year of retail sales growth for IKEA Canada, where we’ve seen significant progress toward our goal of making the shopping experience more accessible and enjoyable for Canadian customers – no matter how or when they choose to interact with IKEA,” said Marsha Smith, who was named IKEA Canada president this past February. “Despite challenging economic times, we have focused on what makes IKEA unique – relevant and inspiring products at low prices that side with the many Canadians.”
The company also continued to make advances as an e-commerce merchant as its web site received some 95 million visits, 8.7% more than during the previous fiscal year. In its summary, it noted e-commerce sales totalled $184.6 million, an uptick of 26.7% from the prior year. This gave IKEA Canada’s e-commerce efforts an 8.5% share of revenue – substantially higher than the Canadian furniture store average of 1.4% for 2015, the last year for which data is available.
In support of this effort, IKEA opened 12 ‘collection points’ across the country while breaking ground on a customer distribution centre in Beauharnois, Quebec. It also announced a third centre to be located in Richmond, British Columbia.
As part of the expansion effort announced in 2015, the retailer built and opened what it says is its most sustainable store in Halifax. It has also broken ground on a new full-size store to be built in Quebec City and opened in late 2018. This will be followed with a new location in London, Ontario in 2019. The latter will give it a store count of 15. The company aims to have 24 full-size stores in operation by the end of 2025.
Store traffic also jumped in fiscal 2017 with some 28 million in-store visits recorded.
During the year, the company said it visited more than 400 homes across the country to conduct research into the consumer, which allowed them to present market-relevant and inspirational solutions in their stores. Insights revealed two key trends that shape how Canadians live their lives at home: urbanisation and technology.
IKEA Canada also expanded its workforce in fiscal 2017, adding 2,200 to the payroll. It now has some 6,300 co-workers across the country with a strong gender balance as 55% of its workforce and 53% of its managers are women.
“This year, I had the opportunity to travel across the country to meet our incredible co-workers, who continue to impress me with their passion to create a better everyday life for our customers,” Smith said. “We truly believe that IKEA co-workers are our best ambassadors and the key to growing our business and delivering strong results.”
The retailer continued to pursue energy and resource independence with the purchase of a second wind farm in southern Alberta. The 88MW Wintering Hills project has 55 turbines that together generate enough electricity to power the equivalent of 54 IKEA stores. It also began outfitting its stores in Burlington and Ottawa with rooftop solar panel installations, joining Etobicoke, Vaughan and North York stores.
As part of its effort to give back to the community, IKEA partnered with the Breakfast Club of Canada to support childhood development and ensure children across Canada have access to a healthy morning meal for the first time. The retailer also continued its partnership with Tree Canada; which has seen the planting of over 30,000 trees and shrubs in the span of 21 years.
The retailer also marked its 40th anniversary in Canada during fiscal 2017, hosting the Then & Now Exhibit at Toronto’s Design Exchange, which shared IKEA’s design journey over the past four decades.