Ikea plans robust growth
Clint Engel -- Furniture Today, October 29, 2012
STOCKHOLM - Home furnishings powerhouse Ikea expects to add some 200 stores worldwide over the next eight years and grow its revenues by as much as 85% - all while becoming energy-independent by 2020.
With the unveiling of a new sustainability strategy last week, the Sweden-based retailer disclosed that it "potentially" could increase group revenue to 45 billion to 50 billion euros by 2020, up from 26.9 billion euros for the most recent fiscal year ended Aug. 31. And its store count will increase to about 500 stores from about 330 today.
The report also noted that Ikea expects to have 200,000 employees by 2020 (up from 131,000 today) and about 1.5 billion annual visitors (up from about 655 million).
Ikea gave the estimates in a new sustainability strategy document, called People & Planet Positive, which it says is integrated into the retailer's long-term growth plans, building on the company's track record of sustainable practices.
The plan has three focus areas. It aims to inspire and enable consumers to live more sustainable lives by, for instance, offering more energy-efficient products. The company also intends to become "energy and resource independent" and will emphasize "taking the lead in creating a better life for the people and communities," including supporting good working conditions throughout its supply chain and supporting human rights, according to a release.
Under this new direction, "We will use sustainability to drive innovation, transform our business, shape our investments and unleash new business opportunities," the retailer said in the report.
Ikea said its goals include producing as much renewable energy as it consumes, spending some $1.8 billion on wind and solar projects through 2020, and improving the energy efficiency of its operations by at least 20% by the fiscal year ending in August 2015.
In the United States, Ikea has increased the number of rooftop solar installations to 34 stores and distributions centers and has five more under way. There are also 33 electric vehicle charging stations available at nine of its western U.S. stores.
Earlier, Ikea announced that it will shift to selling only LED lighting - longer lasting and more energy-efficient than traditional bulbs - by 2016. It now says it also will limit sales of other products to energy-efficient designs, such as induction cookers. According to a Reuters report, it also plans to grow at least as many trees as it uses to make its goods.
Ikea estimates that a shift to more efficient appliances would cut an average household's energy use by 30%, the report said.
"That's like having a 10% pay rise for most people," Steve Howard, Ikea's chief sustainability officer, told Reuters.