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Ikea putting more than $100M into B.C. expansion

Richmond store set for significant upgrade with added distribution centre
selwyncrittendon-rk
Ikea Canada CEO Selwyn Crittendon sits in a plush chair at his company's Coquitlam store

Popular ready-to-assemble furniture seller Ikea plans to pump more than $100 million into expanding its Richmond store.

The Sweden-founded and now Netherlands-based retailer is also exploring adding more pick-up points across B.C. for e-commerce shoppers, according to its new Ikea Canada CEO.

BIV asked Selwyn Crittendon, who worked at Ikea in the U.S. for more than 21 years before becoming CEO at Ikea Canada in August, whether his company would open more stores in the province.

“There’s always a possibility,” he said. “It's all about timing and making sure that we make the best decision on how the customer wants to shop.”

His company earlier this year submitted a development permit with the City of Richmond. It wants to increase the size of its Richmond store at 3320 Jacombs Road to 507,000 square feet, up from the current 345,000 square feet, although some of the added space will be a distribution centre.

Crittendon said the company is targeting the store's reconstruction to be complete by late 2025 and when the new space is complete the company would close its distribution centre at 7031 York Road in Richmond.

Ikea Canada also operates a warehouse in Coquitlam that it has no plans to close, Crittendon said.

When the Richmond distribution centre closes, Ikea Canada would have less total square footage in Richmond.

The company is counting on technology investments to make its future space more efficient.

“We'll be looking at automated dynamic picking, which is an automated warehouse system that will automatically manage and move articles between storage and picking locations,” he said.

This and other technology upgrades will help speed workers’ ability to assemble customer orders for shipment while also being better ergonomically for staff, he added.

“We are actively pursuing more ways to be more accessible to many more Canadians, especially here in Vancouver,” he said.

He called his stores in Richmond and Coquitlam “great,” but added “there's still an opportunity in the city centers and the growing areas outside of the city. I think there's still an opportunity for Ikea to be closer [to customers.]”

Ikea Canada operates pick-up locations in Victoria, Nanaimo and Kelowna, which the company calls "Ikea Collection” outlets.

Its also has a partnership that lets customers pick up Ikea Canada purchases at three PenguinPickUp locations in Vancouver.

About 28.4 per cent of Ikea Canada’s $2.9 billion in annual revenue comes from e-commerce, Crittendon said.

E-commerce sales are also increasing faster than bricks-and-mortar store sales 16 per cent year-over-year, compared with 10.9 per cent year-over-year for all sales combined in the fiscal year that ended August 31.

Sales growth this fall has kept pace with what the company saw last year, Crittendon added. 

Investments in the company’s smartphone app enable users to access artificial intelligence and take visual scans of their homes.

A user could then click on a table in the visual scan to remove the item, and then replace it with a virtual Ikea table, for example, to gauge how the furniture would look once installed, Crittendon said.

Physical store visits also remain popular.

Ikea Canada counted 28.6 million customers at physical locations in its last fiscal year, up 6.3 per cent from a year earlier.

Its data also show that it delivered 1.61 million purchases and processed 602,260 click-and-collect orders.

Despite not being part of a public company, Ikea Canada releases ample data to show how its business is performing.

On the quirkier side of those statistics is a breakdown of its food sales, which last year increased by 27 per cent, to $123 million. Fueling those sales were customers ordering 15.6 million meatballs, three million hot dogs and 2.1 million plant balls.

While controlled largely by INGKA Holding, Ikea is wholly owned by Liechtenstein-based Stichting INGKA Foundation.

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