IKEA appears to have big plans for its small-format retail concept, announcing that a new store at the Scarborough Town Centre will open in the summer of 2023.
Like its first Toronto location, Aura, which opened in June, the product range is designed to meet the needs of urbanites, and is focused on affordability, sustainability and small-space living. It’s a model IKEA has successfully rolled out to cities such as Paris, Moscow, Shanghai and New York.
IKEA’s small-format stores have the same look and feel as an IKEA store, but in a scaled-down size. For example, its North York Toronto location, which opened in 1987, is about 25,311 square metres, while Scarborough Town Centre will only be about one third the size.
The new Scarborough store boasts close highway and new subway extension access, parking, and services such as home delivery, assembly, design services, measuring and installation, and sell-back, as well as a dedicated planning hub and Swedish deli.
“The planned Scarborough store is part of our broader investment in sustainability, affordability and omnichannel shopping experiences that help to make us more accessible to our customers,” says Michael Ward, IKEA Canada’s CEO and chief sustainability officer.
Big box retailers becoming smaller is part of a larger, broader retail trend. A Deloitte study predicted the future grocer would be small format as well, thanks to an entrenched minority of shoppers drawn to the convenience of omnichannel. Pet Valu’s February foray into Quebec by way of its Chico acquisition is largely built around small-format stores and premium product offerings, as well as more personalized service.
Today, IKEA also unveiled its 2022 Summary Report, which reveals national store visits have increased by 123% to 26 million, while IKEA Canada sales increased 1.3% to $2.6 billion in the financial year ending August 31, 2022.
The circular economy and upcycling, or making old things new again, has been a consistent part of IKEA’s messaging and brand purpose. And through the IKEA sell-back program, which lets people get in-store credit in exchange for its gently used furniture, the retailer reports that customers returned almost 3,000 items.
According to the retailer, despite the resurgence of in-store activity, online shopping continues to play a key role to its business model: customers made over 189 million online visits to IKEA.ca and the IKEA app between September 2021 and August 2022. IKEA also says it delivered on 1.77 million orders and processed 776,510 click-and-collect orders.
