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Ikea is shrinking its stores as food hall gets the boot

Despite this, retail analysts have warned spending could slow, particularly on homewares and DIY projects, over the next couple of months as households deal with continued inflation, more interest rate rises and the end of the temporary discount to the fuel excise.


Viinanen highlighted the attraction of Ikea’s value-focused furniture when times got tough, given Australians’ enduring passion for their homes.

“When the wallets are getting thinner, this is the right place to be,” she said.

The “plan and order” sites mark a move towards more one-on-one customer service. While traditional Ikea stores lead shoppers around a maze of self-service products, the new format is more of a concierge service.

Customers can make direct appointments at Highpoint for a staff member to advise them on furniture for their space.

Viinanen is upbeat about Ikea’s competitive edge in the local homewares market, which has boomed throughout pandemic lockdowns. While the new concept store is smaller, the retailer’s ambitions in Australia are still big.


She said the business, a Swedish multinational conglomerate based in the Netherlands, has proved it has an edge over the slew of online-only furniture retailers that have emerged over the past few years in Australia – in terms of its stores and the company’s ability to track consumer lifestyle trends and design specific pieces accordingly.

“We know the needs of the customers, we are listening every year. There is no company, compared to us, that is that affordable,” she said.

The new Ikea concept store is about 300 metres squared, compared with the big box stores which vary in size but can be bigger than 30,000 metres squared.

While the company has not announced plans for more “plan and order” sites yet in Australia, the format has formed a key part of Ikea’s strategy overseas.

Viinanen said the company would be evaluating how customers respond to the store before deciding whether to roll out more sites or try another format that would fit in a shopping centre complex.

“We will see how successful we are, and then we will have to figure out the next step.”

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