Why IKEA Should Locate in Canadian Downtowns

Why aren’t IKEA stores located Downtown?

All of Canada’s large-format IKEA stores are currently located in the suburbs. Although the Swedish retailer will be testing small-format pick-up and order stores in several new Canadian markets, none are planned for downtowns, according to the company’s Canadian president Stefan Sjöstrand. This is a missed opportunity, according to one retail expert, as Canadian downtowns continue to thrive with the addition of thousands of new residents annually.

Mr. Sjöstrand spoke at the Toronto Board of Trade last week, where he discussed the company’s plans for Canada. Included will be a doubling of its Canadian store count over the next 10 years, primarily through smaller-format pickup and order locations. IKEA is already seeing tremendous success in Canada, with annual sales of $1.795 billion at its 12 existing stores, plus an additional $103 million in e-commerce.

IKEA’s full-sized Canadian stores average a whopping 323,000 square feet, with new pick-up stores to be in the 20,000 to 40,000 square foot range. All stores, including recently announced pick-up locations, will be in automobile-dependant suburbs.

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