Ikea to invest £2.6bn to create in-store warehouses to fulfil online orders

Ikea stock levels return to normal as supply chain disruption eases
// Ikea is to plough investment to create mini-distribution centres at its big out-of-town shops to fulfil online orders from stores
// Much of this spending will be made in London, which is increasingly viewed as a test-bed for Ikea

Homewares giant Ikea is to spend 3 billion euros (£2.6 billion) on its stores, with much of the investment going towards transforming part of its out-of-town shops into ecommerce distribution centres.

A third of the spend is earmarked to be made in London, which is increasingly a test-bed for new store formats and logistics operations globally, Tolga Oncu, retail manager at Ingka group, the firm that owns Ikea stores, told Reuters.

Ikea has adapted to the rise in online shopping in recent years by developing smaller stores, such as the one in London’s Hammersmith that opened in February, as well as overhauling its website and introducing virtual planning services.

READ MORE: Ikea set to close Tottenham superstore placing 450 jobs at risk

Oncu said: “We feel we have a catch-up to do on the back-end of our operation (and) we have realised that by including stores in our last mile and fulfilment design network we can create a win-win situation.”

Ikea also stands to cut shipping costs and times by fulfilling online orders from warehouse sections of stores near big cities rather than from central distribution centres. 

Bringing automation to the new in-store warehouses will account for much of the investment, Oncu said.

The investment will also go towards opening new stores in countries such as Romania, China and India as well as planning studios in Canada, Denmark, Italy, India, US and other countries.

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