IKEA’s First UK Small Format High Street Store

IKEA’s First UK Small Format High Street Store

February 21, 2022
4 min read

In 1987, IKEA opened its first UK store in Warrington. Fast forward to 24th February 2022, the much-loved furniture store embarked on a new chapter with the opening of its inaugural small format high street store in West London. We have reviewed why the Swedish furniture and furnishings giant made this move and its performance so far.

The 4,600 sq m store is one of only eight small format shops that IKEA operates globally and will focus on home accessories and soft furnishings. It will also have an exclusive food offer: the Swedish Deli – which will serve a range of Scandinavian delicacies.

Why Did IKEA Make This Move

Their Hammersmith store is the latest step in IKEA’s global transformation programme. Kick-started in 2018, this has seen the group undertake a ‘total market approach’ centring on convenience and accessibility to meet demand when and where it arises. Alongside huge investment in e-commerce, there’s also been an evolution of its store formats. This change reflects the evolution in the US retail experience changes we have also witnessed.

A core tenet in this, amid rising urbanisation and changing shopping habits, has been the shift into city centres. In the UK, this has already manifested in London’s two, now-closed, ‘Planning Studios’, while globally we have seen bigger stores open in Manhattan, Paris, Vienna and Sydney.

The Hammersmith store signified the next stage of their evolution into the UK market. Indeed, this high street store was the first in the domestic market under IKEA’s ‘Livat branding’, characterised by the shift to multi-purpose spaces, and follows several similar openings across China. 

In terms of location, the Kings Mall shopping centre is well-positioned amid a number of transport hubs, catering to a dense local urban population. More practically, the store plugs a hole given the comparative lack of an IKEA store in West London.

Tapping Into The Homeware Boom

Alongside its newer format, the Hammersmith location focuses on ‘lighter-ticket’ sectors, offering more than 2,000 home furnishing accessories. Alongside the more pragmatic rationale of consumers transporting these goods home, homewares have been among the best performing non-essential retail sectors since March 2020, as they were elevated as an affordable means of personalising living spaces amid extended periods indoors. Recent inflation has likely also encouraged people to look at the options to upgrade and restyle their homes with new furniture as an alternative to moving.

Moreover, although disruption has seen online overtake in-store as the most popular means of purchase, homewares remain one of the most prevalent areas of physical retail. Significantly for IKEA, this has seen ‘fast homewares’ become the latest high-street trend, often filling the void left by fast fashion and other sectors in the past two years. Looking ahead, this trend shows little signs of slowing down.

Additionally, many of IKEA’s competitors in the furniture market, such as John Lewis, Argos, Next and Dreams have already had a presence on the high street for years. In 2023, DIY giant B&Q also opened their Local stores across the UK, highlighting to us that the time couldn’t have been more right for IKEA to make its mark on the high street.

Changing Shopping Behaviours Accelerate the Need for Stores to Do More

Although the Hammersmith location was acquired in January 2020, prior to the COVID-19 pandemic, similar to the burgeoning demand for homewares, the market for these city-centre stores has undoubtedly been exacerbated by the changes seen since 2020. Indeed, many of the trends that fed into this acquisition, whether online, demand for convenience and the need for experiences, have only been accelerated since.

How Is The Store Performing?

IKEA’s plan seems to be working. Since opening, the Hammersmith store has attracted nearly a thousand reviews on Google, with the majority of these being 5-star. The 22 IKEA stores in the UK have attracted one million extra visits over the twelve months to October 2023 which is a 2.2% uplift from the previous year. IKEA’s smaller, more focused format is also being developed further, with Plan & Order Points dedicated to kitchen, bedroom and living room planning, coming to three locations in the North-West.

With so much of our retail lives moving online, IKEA is still committed to developing in-person experiences to build its business.

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Marco Amasanti
Marco Amasanti

Marco Amasanti is a Retail Analyst focusing on spending on the home, including DIY, electricals and furniture

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