Planning problems force Ikea to open smaller stores in UK

Furniture giant Ikea is considering scaling down future stores in a bid to sidestep planning problems and increase the number of outlets in the UK.

The Swedish company, renowned for its huge superstores and flat-pack furniture, has been hampered from expanding its string of 12 stores in Britain because it cannot find suitable sites which are acceptable to planners.

And so the store, which last year posted record sales of more than £1bn (€1.42bn), is investigating smaller stores, selling a reduced range of stock.

UK boss Peter Hogsted told Retail Week: “We have spent the past year creating an Ikea store that operates on a smaller footprint.

“We hope we can use this new format to really start our expansion and open eight to 10 stores over the next three years.”

He added: “It is not about winning or losing, but realising the planning regime is as it is. There is little understanding or support for furniture retailers like Ikea in the UK.”

The company is also poised to recruit some 150 new managers.

A spokeswoman for the store said Ikea was “constantly” looking at sites up and down the country, and the business had previously announced it had wanted to open 10 stores in 10 years, as the pressure on stores currently was “enormous”.

“If there are lots of people coming in, customers aren’t happy. They have had to travel for miles and co-workers are dealing with huge volumes and we get queues and so we are trying to build more stores – that is what would make it better.

“They announced a little while ago they wanted 10 more stores in 10 years, and John Prescott said no, and that has halted things a lot for us.”

She said there were many ideas in the pipeline, including building upwards: “If they don’t want us to have these huge stores, maybe we should go for smaller, more compact stores, maybe cut the range – although that does go against the Idea concept, at least we are getting our products out there.”

She added a second High court appeal against Mr Prescott’s rejection of a store outside Stockport was due.

In 2002, in rejecting its application, the Deputy Prime Minister said the store’s philosophy ran “counter to the Government’s objectives to ensure sustainability and promote social inclusion”.

According to Mr Prescott, the fact that 97.1% of Ikea patrons used cars to travel to the stores demonstrated the effective exclusion of swathes of the non-driving population.

He refused the plans for the 28,000 sq m store on the derelict site on the outskirts of the Cheshire town despite a recommendation from a planning inspector, who passed the application after a public inquiry.

Despite his own inspector’s decision, the Secretary of State concluded that “a store of the size proposed would be likely to have an impact on other centres”.

And he suggested the furniture giant should make more effort to look for smaller town centre sites.

Privately-owned Ikea broke into the UK market in 1987 with its first store in north London. It now employs about 6,000 staff across 12 outlets at locations including Birmingham, Edinburgh, Manchester and Newcastle.

It keeps prices low by packing and shipping its items in flat packs, contributing to profit margins that are higher than its rivals.