Ikea eyes bigger city centre stores as shopping habits change

Ikea may open large stores in city centres as it seeks to adapt to changing shopping habits.

Javier Quinones, UK boss of the Swedish furniture giant, said the stores would be "in between" the size of its new smaller city centre format and its big out-of-town stores.

"There are many formats we can try and will try," he said.

The retailer plans to add 4,000 staff to its global workforce over the next two years as part of a business revamp.

In total the company is creating 11,500 new posts, but eliminating 7,500 other jobs.

As many as 350 jobs are likely to go in the UK, mainly in head-office functions.

The new jobs will be created at smaller stores, called Touchpoints. About 30 are planned.

The first, described by Ikea as a planning studio, is already trading on Tottenham Court Road in central London.

Customers can visit these shops for more complicated purchases, such as kitchens and bedrooms, and then order them online.

But Mr Quinones said not all city centre stores would be as small as the Tottenham Court Road outlet.

The firm has been relatively slow to move to online shopping, but he said it had to respond to a fall in car ownership and consumers' desire for shopping to be convenient.

Ingka Holding, Ikea's parent group, attributed a 2% rise in sales to €34.8bn (£31bn) for 2017-2018 to stronger online sales and store openings.

The number of visitors to Ikea's website rose 10% to 2.4 billion, higher than the 3% rise in store customers to 838 million.

Jesper Brodin, Ikea chief executive, said: "The retail landscape is transforming at a scale and pace we've never seen before. As customer behaviours change rapidly, we are investing and developing our business to meet their needs in better and new ways."

Ikea's city centre expansion is likely to be welcomed by struggling High Streets amid a tough trading climate.

About 14 shops closed every day in the first six months of the year, according to the most recent figures available from accountancy firm PwC.

Ikea also plans to open a new big store in Greenwich in southeast London next year, creating 500 new jobs, but has scrapped plans for another outlet, at Cuerden, Lancashire because the site was "no longer viable".

Mr Quinones insisted that the firm had not given up on its large store model, saying people still wanted the "full Ikea experience".