IKEA’s holding company Ingka Group is reportedly planning to invest USD 3.2 billion (3 billion euros) in new and current stores through 2023, with much of the investments going toward converting its signature out-of-town locations into e-commerce distribution hubs.

Confirming the news, Tolga Oncu, the Retail Operations Manager at IKEA said that the funds would be distributed across all areas, with around a one-third going to London, which will serve as a testbed for new store layouts and logistics setups. He claimed that the majority of the redesigning and transformation would be for IKEA’s existing stores that could handle e-commerce transactions instead of creating one central storage warehouse for its online purchases.

Oncu added that the company has a lot to improve on its back-end operations and adding new stores with a redesigned network for its existing and new stores could create a win-win situation for the retailer.  Shipping online purchases from adjacent out-of-town stores' warehouse portions will result in faster and cheaper delivery with lower emissions than shipping from a few logistics centers.

As a result of global concerns, high inflation, and deteriorating consumer confidence, many firms are becoming cautious. However, Oncu believes that the time is ideal for IKEA, which is backed by its owner foundations.

The company does believe that consumer spending patterns might look a little gloomy but the value for time and money, good quality offerings at affordable prices, and design with sustainability will increase its demand. As individuals spent more time at home during the pandemic, IKEA saw unprecedented demand for its low-cost home furnishings.

Ingka has invested about 2.1 billion euros in new and existing stores in its 32 markets during the last three fiscal years. Exclusive "blue-box stores" will be opened in India, Romania, and China as well as new city stores and planning studios in Canada, India, Denmark, the United States, Italy, and other nations.

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https://money.usnews.com/investing/news/articles/2022-05-09/ikea-to-spend-3-billion-euros-on-stores-as-it-adapts-to-e-commerce