IKEA strategy targets big/bigger/best stores

DSN Retailing Today, Nov 8, 2004

With an all-own-brand assortment, IKEA is becoming a more important private label player, building a significant product range beyond furniture.

IKEA is undertaking a major store-expansion program, but if geographic growth is key, so is physical growth. A proportion of new stores are enlarged replacement units, but those, too, permit IKEA to boost its domestics, lighting, rugs, cookware, tableware and other housewares categories significantly.

"All of our new stores range from 270,000 to 350,000 square feet," said Joe Roth, an IKEA spokesman. "The reason for relocations is for them to be large enough to showcase the range of IKEA products."

Previously, IKEA offered single examples of inexpensive, often funky, items for consumers stretching home furnishings budgets.

Today, IKEA offers expanded good/better/best selections. In cookware, it opens with aluminum, where a 9.5-inch diameter pan is just 2.49. Yet, even its four-piece "best" Annon 18/10 steel set, featuring two saucepans, a pot and an 8-inch frying pan, is just $13.99.