Ikea has revised its ideas for expansion into the Spanish market due to Spanish administrative burdens slowing their progress, said the new CEO of Ikea Spain, Bethlehem Frau, in a press conference recently.
The Swedish multinational has plans to invest 2,500 million euros into the opening of up to 14 stores until 2020, eight of those to include regional shopping centres, which would generate more than 18,000 jobs (about 5,600 in the Ikea stores alone, and 12,800 more in the shopping centres).
If this plan is approved, IKEA will double its commercial outlets in Spain, from the current 13 stores to 27 outlets, and hope that by 2020 three out of four households will have an Ikea store within an hour’s drive away. The first of these stores will open in Valladolid on 20th December.
“Ikea is totally committed to Spain despite the current difficult economic times, believing it to be a market with great potential. We want to continue investing and creating jobs,” said Frau, also saying that the company’s projects would make a big contribution to “energising” the construction sector.
The program of openings, for the period 2010-2015, are for 12 new facilities – 2 of which are already up and running – with an investment of 2,000 million euros.
Ikea’s CEO also pointed out that Spain is now the seventh largest market for Ikea, with sales accounting for 5% of the total turnover of the multinational, and a business growth which, in their opinion, shows that customers appreciate the value for money of the company and its products.
He stated that the company discounted prices by an average of 1.6% in their 2011 fiscal year, with reductions in some products reaching 60%, in response to the falling purchasing power of many Spanish homes.
Ikea closed its last financial year, between 1st September, 2010 and 31st August, 2011, with a stated turnover of 1,279 million euros in Spain, which represents an increase of 2.2%, which is remarkable in a climate of economic crisis where the furniture and decoration sector has seen a 40% drop.
El Mundo reports that during the past year, the 13 Ikea stores in Spain registered a 5.6% increase in visits, reaching a figure of 38 million visitors.