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Red tape slows Ikea’s plans for 3 new London stores


The CEO of Swedish furniture and homewares retailer Ikea confirmed plans to open three new stores in London, in an interview with The Wall Street Journal yesterday.

Mikael Ohlsson admitted however that his company’s ambitions were being slowed by imposed local requirements relating to traffic and infrastructure.

Ikea, which is notoriously secretive over its plans, would prefer to see more free trade and harmonisation of regulations as local red tape is becoming frustrating.

Ohlsson said: “It’s a long process of getting the right traffic solutions. In the UK, they want retail to get into the city.

“But that’s not good for furniture retail, especially in bulk. We prefer to be further away from the city centre. But the permits are taking a lot of time.”

This reluctance to offer more space to international retailers outside of town centres may be indicative of local councils’ fears regarding the so-called ‘death of the high street’ and could become more prevalent following the completion of the Mary Portas led UK government review into the problem.

During its last full-year period ending August 31st 2010 net profit totalled €2.7 billion (£2.4 billion), up 6.1 per cent year-on-year, and trading this year is said to be strong.

Other traders in the homewares market have been finding it increasingly tough to generate sales as families look to cut back on non-essential purchases, and in a worrying sign for competitors Ikea looks ready to cut its prices further.

“What decides how much a lamp should cost?” Ohlsson continued.

“Only imagination sets the limits. And we constantly strive to use materials better and transport our products more efficiently.”

“We are always critical. We ask: Why can’t we do this better? Why can’t it be cheaper? We swing between frustration and inspiration and are never complacent.”

Published on Tuesday 05 July by Editorial Assistant

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