Since opening its first UK store in Warrington in 1987, IKEA has firmly established itself as a household name across the nation. With over 25 stores, including traditional outlets, smaller formats like Plan & Order points, and city-centre locations such as the Hammersmith store, IKEA has adapted to meet evolving customer needs – a journey of expansions we explored in our conversation with UK and Ireland CEO Peter Jelkeby.
“The UK has been an important market for IKEA since we opened our first store in Warrington in 1987,” says Peter Jelkeby, CEO of IKEA UK & Ireland. “The UK retail market has an open approach to innovation which offers a flexible environment for IKEA to experiment and evolve.”
Today, IKEA employs more than 12,000 people in the UK and offers a growing range of services, underscoring the importance of the UK as a market for the Swedish retail giant.
Peter highlights the UK’s strong consumer demand for affordable, high-quality products, rooted in IKEA’s Scandinavian heritage and democratic design principles. Furthermore, the UK’s ambitious net-zero targets and demand for eco-friendly products align closely with IKEA’s sustainability goals. “The UK provides an ideal platform for us to expand our renewable energy use, promote circular economy models, and offer sustainable product lines and services,” he notes.
Collaborative partnerships: a key to growth
IKEA’s success in the UK is also attributed to its strong partnerships with government bodies and industry organisations. For example, the company works closely with the Department for Business and Trade (DBT), which is highly regarded for its engagement with the retail sector and its efforts to support its continued growth. IKEA UK is also a member of the British Retail Consortium, which allows it to address industry challenges collectively.
“We are members of the British Retail Consortium, which allows us to join forces with other leading retailers to address key industry challenges and work together to promote a fair, sustainable and innovative retail sector,” Jelkeby explains. He also underscores the value of being a member of the Swedish Chamber of Commerce for the UK, which strengthens IKEA’s cultural and business ties with Sweden while providing networking opportunities across industries and sizes of businesses.
Learning from the journey
Reflecting on IKEA’s expansion in the UK, Jelkeby acknowledges that the journey has been a learning experience, particularly during the pandemic. “The pandemic brought a seismic shift in retail, forcing rapid adaptation to meet new consumer behaviours and needs,” Peter says. “We had to make significant changes almost overnight to stay accessible and relevant.”
The pandemic accelerated IKEA’s digital transformation, pushing the company to enhance its online offerings and integrate platforms to provide a seamless omnichannel experience. Peter emphasises the importance of building meaningful relationships with local communities and authorities to ensure that stores contribute positively to the local economy and wider society.
“We don’t just want to expand into an area; we want to become part of that community,” he asserts.
Opportunities for Swedish businesses
For Swedish businesses considering expansion into the UK, Peter highlights the opportunities available in traditional sectors such as financial services and retail, as well as emerging areas driven by evolving consumer behaviour and government policies.
“The UK retail market is advanced in terms of the way retailers interact with customers,” he explains. IKEA’s strategy of blending online and in-store shopping experiences serves as an example of how businesses can cater to the UK’s demand for convenience and flexibility. The company has also experimented with smaller city-centre stores and click-and-collect formats to improve accessibility.
Swedish businesses can leverage their expertise in green technologies and sustainable practices to align with the UK’s net-zero targets. “There are opportunities to build upon these credentials to ensure alignment with government net-zero targets by focusing on investments in renewable energies or ensuring sustainability is at the heart of your business strategy,” Peter advises.
IKEA’s commitment to sustainability
At the core of IKEA’s operations in the UK is its commitment to sustainability. Guided by its vision to create a better everyday life for many people, the company has integrated sustainability into every aspect of its business. “A better planet is a better home for us all, which is why we're striving to become more affordable, accessible and sustainable,” says Peter.
IKEA’s UK initiatives include using low-climate-impact materials, transitioning to a circular business model, and electrifying its fleet. Currently, 65% of IKEA’s last-mile deliveries in the UK are zero-emission, with a target of 90% by 2025. The company also offers buyback and resale schemes to give products a second life.
Tips for Swedish businesses
Peter’s advice for Swedish businesses looking to expand into the UK includes taking the time to understand regional needs and expectations. “This can help to build more authentic connections and gain valuable insights,” he says.
He also stresses the importance of digital readiness and aligning with the UK’s high standards for innovation. “The UK has a deeply entrepreneurial spirit, which has fostered a culture of innovation and agility,” he observes.
Lastly, Peter underscores the need for sustainability to be integral to any business strategy. “This will not only enable you to support the UK’s drive to become net-zero but also demonstrate to customers that you are committed to contributing to a more sustainable society,” he concludes.
IKEA’s journey in the UK offers valuable insights for Swedish businesses looking to expand internationally. By embracing innovation, building strong partnerships, and committing to sustainability, IKEA has not only established itself as a leader in the UK retail market but also as a model for businesses aspiring to grow and thrive in new markets.
