IKEA Canada sets growth plan
BURLINGTON, Ontario (11 November 2015) - IKEA Canada, this country's second largest furniture retailer, intends to double both its store count and its sales over the coming decade after recording revenue growth of 10.4% for its 2015 fiscal year, which ended on August 31.
The company, the Canadian arm of the global furniture and furnishings giant headquartered in The Netherlands, also said store traffic for the year was up 4% to 26 million, while digital traffic to its web and digital platforms were up at an even faster pace with 75 million visits. Total sales for the 2015 fiscal year were $1.79 billion.
In this country, only Leon's Furniture has higher annual sales.
"I am inspired by what we have accomplished together thanks to the dedication of our great IKEA co-workers and the loyalty of our customers across the country," IKEA Canada president Stefan Sjöstrand said. "Fiscal 2015 has been a fantastic year for IKEA Canada and our efforts to be a leading choice for the many Canadians."
Sjöstrand made the comments during an address to the Toronto Board of Trade and this marks the first time IKEA Canada has publicly disclosed such business information and is part of the parent company's global efforts to be transparent and accountable to its co-workers and customers.
He also reported a nearly 40% jump in purchases on IKEA's web and mobile platforms. "E-commerce was up significantly and for the first time in IKEA Canada's history exceeded the $100 million mark with total online sales of $103 million," he added.
Earlier this year, Sjöstrand announced the company would open as many as 10 smaller format stores across the country. This pick-up and order points would service consumers who ordered merchandise via the web and will have small product displays. The first two are expected to open in London, Ontario and Quebec City sometime in the next few weeks. Others are now under construction in the Ontario cities of St. Catharines and Whitby.
IKEA operates 12 full-size stores across the country - a number it plans to double before 2025.
A spokesman told Home Goods Online: "IKEA Canada will be expanding coast-to-coast in new and existing cities, with new locations with existing formats and also open some new formats. The 12 additional stores in 10 years does not include the pick- up and order points. We expect to announce more in the New Year, so stay tuned."
IKEA Canada's parent company recently stated it intends to grow world-wide revenues from €31.9 billion in 2015 to €50 billion in 2020. "In co-ordination with our expansion plans, IKEA Canada expects to double its annual sales by 2025," the spokesman for the Canadian operation said.
Sjöstrand told the board of trade IKEA Canada is energy independent, thanks primarily to the wind farm it acquired in Southern Alberta almost two years ago as well as the solar installations on many of its stores. "IKEA Canada now produces roughly three times more energy than is consumed by its operations," he said.
IKEA is also the first major Canadian retailer to sell only energy efficient LED light bulbs and to install free electric vehicle charging stations at all of its stores. In addition, IKEA stores are now diverting 85% of waste from going into landfills thanks to robust recycling programs.
"IKEA's goal is to be both people and planet positive, including helping Canadians live a more sustainable life at home," Sjöstrand continued. "For example, so far this year, IKEA Canada has sold 1.5 million LED bulbs, which means we have helped Canadians save $12 million in energy costs just in this year alone."
Next year will mark IKEA's 40th anniversary in the Canadian market, so they don't see these plans as rapid or aggressive.
"We'd rather take it slowly and understand the market and understand how people live their life at home," the spokesman told HGO. "Other retailers see challenges such as: smaller markets, lack of retail space, high regulatory standards, increasing competition from retailers entering the market. With deep roots in Canada, IKEA successfully navigated those challenges long ago and is now taking a stand to expand the business.
"IKEA Canada has more opportunities than challenges these days and has seen little impact on our business from new competition," she added.
Related Story: IKEA Canada sales up 11.9% in FY2015Related Story: IKEA announces pick-up points for St. Catharines and Whitby