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Last Updated: Tuesday, 10 January 2006, 10:42 GMT
Ikea targeting British expansion
Ikea store in Edmonton, North London
Big out-of-town stores are now off the agenda for Ikea
Swedish retailer Ikea is to expand significantly in the UK, opening a string of stores in city centres.

Ikea is to spend 1bn (1.4bn euros) on 10 new stores as part of a revamped strategy, seing it shift its focus away from new out-of-town sites.

The company claimed that planning restrictions had thwarted its efforts to build further out-of-town stores.

Ikea will open its first new store in Coventry next year, adding to its existing 14 outlets.

Closer to home

Ikea is well known for its huge out-of-town stores on the outskirts of London, Newcastle, Glasgow and Edinburgh.

IKEA'S TOP MARKETS (SHARE OF GLOBAL SALES)
Germany: 19%
United States: 11%
United Kingdom: 11%
France: 9%
Sweden: 8%

However, it has frequently encountered planning problems and was forced to drop plans for a store in Greater Manchester last year after the scheme was rejected by Deputy Prime Minister John Prescott.

Ikea also believes that it can no longer rely on customers being prepared to drive huge distances to its stores, as they often do at the moment.

As part of the expansion, Ikea will launch a new website allowing customers in some parts of the UK to buy goods online.

'Unsustainable'

"We have traditionally expanded on the edge of town centres but in the last three or four years it has become increasingly difficult to get planning consent because of the government's planning policy," Scott Cordrey, Ikea's property manager, said.

"More than 30% of our business is with people who are travelling for two hours to reach an Ikea store. For us, that is not sustainable."

Ikea has not revealed which other cities it is considering for new stores.

The UK is Ikea's third largest market - behind Germany and the United States - accounting for 11% of worldwide sales.




SEE ALSO:
Ikea loses fight to build store
18 Feb 05 |  Manchester
Ikea reaches UK sales milestone
01 Oct 04 |  Business


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