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IKEA
Type Private
Industry Retail
Founded Älmhult, Sweden (1943)
Founder Ingvar Kamprad
Headquarters Delft,[1] Netherlands
Europe Area served Asia North America Oceania Africa Atlantic
Key people Peter Agnefjäll
(Chairman and CEO)
Products Self-assembly furniture
[2] Revenue €29.293 billion (2014)
Operating income €3.793 billion (2014)[2]
Net income €3.329 billion (2014)[2]
[2] Total assets €44.667 billion (2014)
[2] Total equity €31.608 billion (2014) Owner Stichting INGKA Foundation
Number of employees 147,000 (2014)[2]
Website www.ikea.com
IKEA (/aɪˈ ki ː ə/; Swedish: [ɪˈ ke ːˈ a] [3]) is a multinational group of companies that designs and sells ready-to-assemble furniture (such asbeds, chairs and desks), appliances, small motor vehicles and home accessories. As of January 2008, it is the world's largest furniture retailer. [4] Founded in Sweden in 1943 by then-17-year-old Ingvar Kamprad, who was listed as one of the world's richest people in 2013,[5] the company's name is an acronym that consists of the initials of Ingvar Kamprad, Elmtaryd (the farm where he grew up), and A gunnaryd (his hometown in Småland, south Sweden).[6] The company is known for its modern architectural designs for various types of appliances and furniture, and its interior design work is often associated with an eco-friendly simplicity.[7] In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion. The IKEA group has a complex corporate structure and is controlled by several foundations based in the Netherlands, Luxembourg and Liechtenstein.[8] As of August 2015, IKEA owns and operates 373 stores in 47 countries.[9] In fiscal year 2010, US$23.1 billion worth of goods were sold, a total that represented a 7.7 percent increase over 2009.[10] The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 470 million visitors to IKEA's websites in the year from September 2007 to September 2008.[11] The company is responsible for approximately 1% of world commercial-product wood consumption, making it one of the largest users of wood in the retail sector.[12]
Contents [hide]
• 1History
• 2Store design
o 2.1Layout
o 2.2Food markets
o 2.3Småland
• 3Products and services
o 3.1Furniture
o 3.2Houses and flats
. 3.2.1Solar PV systems
o 3.3Retail
o 3.4Family Mobile
o 3.5Manufacturing o 3.6Product names
o 3.7Catalogue
o 3.8IKEA Family loyalty card
• 4Corporate structure
o 4.1Profits
o 4.2Control by Kamprad
o 4.3Charitable giving
o 4.4Minimum Wage
• 5IKEA Social Initiative
• 6Environmental performance
• 7Negative media attention
• 8Criticisms
o 8.1Accusations of price gouging
o 8.2Biased branding and advertising accusations
o 8.3Errors and recalls
o 8.4Labor issues
o 8.5Operation Scandinavica
o 8.6Use of forced labor, 1980s
o 8.7Verdana typeface
• 9Advertising
• 10Other ventures
• 11Awards
• 12Countries with IKEA presence
• 13References
• 14External links
History[edit] Main article: List of countries with IKEA stores
Map of IKEA stores around the world Legend: Current market locations Future market locations No current or planned market locations
The first IKEA store, located inÄlmhult in Sweden, not far from where the founder was born.
The world's largest IKEA store located near the KTX Gwangmyeong Station in Seoul Capital Area, South Korea.
The world's second largest IKEA store, situated at Kungens Kurva inHuddinge Municipality, Sweden. This IKEA store was opened in 1965.
IKEA store in Shenzhen, China. IKEA store in Frisco, Texas, United States.
IKEA store at Port Island in Kobe, Japan, one of the very few IKEA stores with direct mass transit access.
Entrance to an IKEA store at the 4th floor of MegaBox in Kowloon Bay, Hong Kong.
An IKEA 4.5 Museum display at the outer precinct of the Meiji Shrine inTokyo, Japan.
Ingvar Kamprad founded IKEA in 1943 as a mostly mail-order sales business. It began to sell furniture five years later.[10] The first Möbel-IKÉA store was opened in Älmhult, Småland, in 1958, while the first stores outside Sweden were opened in Norway (1963) and Denmark (1969). The stores spread to other parts of Europe in the 1970s, with the first store outsideScandinavia opening in Switzerland (1973), followed by West Germany (1974). Amid a high level of success, the company's West German executives accidentally opened a store in Konstanz in 1973 instead of Koblenz.[10] Later that decade, stores opened in other parts of the world, such as Japan (1974), Australia and Hong Kong (1975), Canada (1976), and Singapore (1978).[citation needed] IKEA further expanded in the 1980s, opening stores in countries such as France and Spain (1981), Canada (1982), Belgium (1984), the United States (1985), the United Kingdom (1987), Italy (1989).[citation needed] The company then expanded into more countries in the 1990s and 2000s. Germany, with 50 stores, is IKEA's biggest market, followed by the United States, with 42 stores. At the end of the 2009 financial year, the IKEA group operated 267 stores in 25 countries.[13] The first IKEA store in Latin America opened on 17 February 2010 in Santo Domingo, Dominican Republic.[14][15] As of July 2013, the company's presence in developing countries remains minimal. The world's five largest IKEA stores are:
1. Gwangmyeong, Seoul Capital Area, South Korea: 59,000 m2 (640,000 sq ft)
2. Stockholm Kungens Kurva, Sweden: 55,200 m2 (594,000 sq ft)
3. Shanghai Baoshan, China: 55,032 m2 (592,360 sq ft)
4. Shanghai Pudong Beicai, China: 49,400 m2 (532,000 sq ft)
5. Wuxi, China: 49,117 m2 (528,690 sq ft) The largest store in the Southern Hemisphere is located in Tempe, Sydney, Australia with a total area of 39,000 m2 (420,000 sq ft).[16]The biggest store in North America is located in Montreal, in the province of Quebec, Canada. The store was opened in 1986 in the Ville-St-Laurent area, and was completely renovated and expanded in 2012-2013. Built in 1986, the store's initial area was 22,062 m2(237,470 sq ft), while the renovated store now measures 43,636 m2 (469,690 sq ft). In 2014, IKEA opened its first warehouse in Croatia, near Zagreb.[17] Due to problems with building permissions, the construction was postponed to 28 August 2013.[18] Eventually, the warehouse opened its doors on 21 August 2014.[19] The shopping centre in Zagreb with a total area of 38,000 m2 is one of the 5 biggest in Europe and among the 10 biggest IKEA stores in the world.[20][21][22][23] In 2013, IKEA opened its first shopping centre in Vilnius, Lithuania that is the biggest furniture-selling mall in the Baltic states.[24] In March 2013, IKEA opened its first outlet in Qatar, after a delay of several months.[25][26] Like others in the Gulf Cooperation Council, the Doha outlet is operated by the Al-Futtaim Group.[27] In August 2013, the first store in the Baltic States was opened in the Vilnius region of Lithuania. Construction of the 26,500 sq ft (2,500 m2) store commenced in 2011 and the store employs over 200 people.[28] In July 2014 IKEA announced it would open its first store in India in the city of Hyderabad, where the local government has committed to fast track all the required paperwork and permits, as it is seeking to attract foreign investment. The new IKEA is expected to open in 2015.[29] In December 2014, the world's largest IKEA store at 59,000 square meters (640,000 square feet),[30] bigger than the previously largest store in Sweden, opened near the KTX Gwangmyeong Station, located at the heart of South Korea's Seoul Capital Area. A second store will open in Goyang, with a third one planned in Gangdong District, Seoul.[31] IKEA plans to have 5 stores in the country by 2020.[32]
Store design[edit] IKEA Restaurant
The Ikea Marketplace
The Warehouse
Layout[edit] Older IKEA stores are usually blue buildings with yellow accents (also Sweden's national colours) and few windows. They are often designed in a one-way layout, leading customers counter clockwise along what IKEA calls "the long natural way" designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a customer to go directly to the section where the desired goods and services are displayed). There are often shortcuts to other parts of the showroom. Newer IKEA stores, like the one in Mönchengladbach, Germany, make more use of glass, both for aesthetics and functionality. Skylights are also now common in the self-serve warehouses; natural lighting reduces energy costs, improves worker morale and gives a better impression of the products. The sequence first involves going through furniture showrooms making note of selected items. The customer then collects a shopping cartand proceeds to an open-shelf "Market Hall" warehouse for smaller items, then visits the "Self Serve" furniture warehouse to collect previously noted showroom products in flat pack form. Sometimes, they are directed to collect products from an external warehouse on the same site or at a site nearby after purchase. Finally, customers pay for their products at a cash register. Today, most stores follow the same layout of having the showroom upstairs with the marketplace and self-service warehouse downstairs. Some stores are single level, while others have separate warehouses to allow more stock to be kept on-site. Single-level stores are found predominantly in areas where the cost of land would be less than the cost of building a 2-level store, such as the Saarlouis, Germany andHaparanda, Sweden locations. Some stores have dual-level warehouses with machine-controlled silos to allow large quantities of stock to be accessed throughout the selling day. Most IKEA stores offer an "as-is" area at the end of the warehouse, just before the cash registers. Returned, damaged and formerly showcased products are displayed here and sold with a significant discount, but also with a no-returns policy. Most IKEA stores communicate the IKEA policy on environmental issues in this part of the store. The area, which is painted red, is named according to local customs, in the United Kingdom this is referred to as "Bargain Corner", in Sweden "FYND" (Bargains) and in Denmark, "Rodebutikken" (Rummage boutique). In Hong Kong, where shop space is limited and costly, IKEA has opened three outlets across the city, most of which have the one-way layout. They are part of shopping malls, and while being tiny compared to common store design, are huge by Hong Kong standards. The vast majority of IKEA stores are located outside of city centres, primarily because of land cost and traffic access. Several smaller store formats have been unsuccessfully tested in the past (the "midi" concept in the early '90s, which was tested in Ottawa and Heerlen with 9,300 m2 (100,000 sq ft), or a "boutique" shop in Manhattan). A new format for a full-size, city centre store was introduced with the opening of the Manchester (United Kingdom) store, situated in Ashton-Under-Lyne in 2006. Another store, in Coventry opened in December 2007. The store has seven floors and a different flow from other Ikea stores. IKEA's Southampton store which opened in February 2009 is also in the city centre and built in an urban style similar to the Coventry store. IKEA built these stores in response to UK government restrictions blocking retail establishment outside city centres.[33] Another feature of IKEA stores is their long opening hours. Many stores are in operation 24 hours a day with restocking and maintenance being carried out throughout the night. Public opening hours tend to be much longer than most other retailers, with stores open well into the evening in many countries. In the UK, almost all stores are open past 8pm and open around 9am to 10am. IKEA Saudi Arabia stores have some of the longest opening hours worldwide being open from 10am to midnight, 7 days a week. Some IKEA stores are not open on Sundays due to local laws. [34]
The IKEA stores are also known for the free IKEA pencils, whereby some people consider it as a sport to collect as many of these IKEA pencils as they can during their visit. Food markets[edit] Every store includes a restaurant serving traditional Swedish food, including potatoes with Swedish meatballs, cream sauce andlingonberry jam, although there are variations. In Kuala Lumpur, Malaysia, the usual boiled potatoes have been replaced with French fries. Besides these Swedish foods, hot dogs and drinks are also sold, along with a few varieties of the local cuisine, and beverages such as lingonberry juice. Also items such as prinsesstårta (princess cake) are sold as desserts. Stores in Israel sell kosher food with a high degree of rabbinical supervision.[35] The kosher restaurants are separated into dairy and meat areas; falafel and non- dairy ice cream are available at the exit. IKEA stores in Saudi Arabia, Kuwait, Qatar and the United Arab Emirates serve chicken shawarma at the exit café as well as beef hot dogs, while in United Kingdom, a Quorn hot dog is available in the exit café.[36] In many locations, the IKEA restaurants open daily before the rest of the store and serve an inexpensive breakfast. In Canada, this breakfast includes eggs, sausage and hash browns and various add-ons like bacon and pancakes at additional cost. In the United States, the local variation serves scrambled eggs, bacon, country potatoes and a choice of Swedish pancakes or French toast sticks. In the Netherlands, it consists of a croissant, a small bread roll, butter or margarine, jam, a slice of cheese, a boiled egg and coffee or tea. In Australia, it consists of a hash brown, bacon, scrambled eggs, a sausage and a tomato, with a vegetarian option with baked beans which omits the sausage and bacon.[37][38][39] In Germany, this breakfast consists of two bread rolls, one slice of smoked salmon, one slice of cheese, one slice of salami, two portions of butter, one portion of jam, and coffee. Alcoholic drinks, like their Öl Ljus beer, are available in some locations. Refills of coffee, tea, and soft drinks are, as is traditional in Sweden, free of charge within store premises, even in countries where this is uncommon. In Austria, IKEA restaurants offer a free refill policy for soft drinks, a practice that is otherwise unknown in the country. Every store also has a Swedish Food Market that, until 2011, sold branded Swedish prepared specialist foods, such as meatballs, packages of gravy, lingonberry jam, various biscuits and crackers, and salmon and fish roe spread. Later IKEA replaced most of the branded foods and extended its product range with the introduction of the IKEA food label. The new label has a variety of items including chocolates, meatballs, jams, pancakes, salmon, along with various drinks. All IKEA food products are based on Swedish recipes and traditions. The majority of the food production still takes place in Sweden by small, medium and large manufacturers, like Gunnar Dafgård AB, which make its meatballs. Småland[edit] Every store has a play area, named Småland (Swedish for small lands; it is also the Swedish province where Kamprad was born). Parents drop off their children at a gate to the playground, and pick them up after they arrive at another entrance. In some stores, parents are given free pagers by the on-site staff, which the staff can use to summon parents whose children need them earlier than expected; in others, staff summon parents through announcements over the in- store public address system.
Products and services[edit] Furniture[edit] Rather than being sold pre-assembled, much of IKEA's furniture is designed to be self- assembled. The company claims that this helps reduce costs and use of packaging by not shipping air; the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled. This is also practical for many of the chain's European customers, where public transport is commonly used, because the flat-pack methods allow for easier transport via public transportation. IKEA contends that it has been a pioneering force in sustainable approaches to mass consumer culture.[citation needed]. Kamprad calls this "democratic design," meaning that the company applies an integrated approach to manufacturing and design (see also environmental design). In response to the explosion of human population and material expectations in the 20th and 21st centuries, the company implements economies of scale, capturing material streams and creating manufacturing processes that hold costs and resource use down, such as the extensive use of Medium-Density Fiberboard ("MDF"), also called "particle board." It is an engineered wood fibre glued under heat and pressure to create a building material of superior strength which is resistant to warp. IKEA uses cabinet-grade and furniture-grade MDF in all of its MDF products, such as PAX wardrobes and kitchen cupboards. IKEA also uses wood, plastic, and other materials for furniture and other products. The intended result is flexible, adaptable home furnishings, scalable both to smaller homes and dwellings as well as large houses. Not all furniture is stocked at the store level, such as particular sofa colours needing to be shipped from a warehouse to the customer's home (for a delivery charge). The item can also be shipped from the warehouse to the store. Some stores charge an extra fee for this service, but not all.[clarification needed] Houses and flats[edit] IKEA has also expanded its product base to include flat-pack houses, in an effort to cut prices involved in a first-time buyer's home. (This practice is not new; the American retailerSears Roebuck and Company sold houses under the Craftsman brand in a similar fashion (shipped flat pack with instructions to allow the homeowner to assemble it themselves) by mail order as far back as the 1920s; the products were so well constructed that as of 2014 there are original 1920s Craftsman houses still in use), The IKEA product, named BoKlok was launched in Sweden in 1996 in a joint venture with Skanska. Now working in the Nordic countries and in the UK, sites confirmed in England include London, Ashton-under- Lyne, Leeds, Gateshead, Warrington and Liverpool.[40] Solar PV systems[edit] At the end of September 2013, the company announced that solar panel packages, so-called "residential kits", for houses will be sold at 17 UK stores by mid-2014. The decision followed a successful pilot project at the Lakeside IKEA store, whereby one photovoltaic system was sold almost every day. The solar CIGS panels are manufactured by Solibro GmbH a German-based subsidiary of the Chinese company Hanergy.[41][42] By the end of 2014, IKEA began to sell Solibro's solar residential kits in the Netherlands and in Switzerland.[43] Retail[edit] IKEA owns and operates a network of shopping centers MEGA. Family Mobile[edit] Main article: IKEA Family Mobile On 8 August 2008, IKEA UK launched Family Mobile, a virtual mobile phone network, running on T-Mobile. Manufacturing[edit] Although IKEA household products and furniture are designed in Sweden, they are largely manufactured in developing countries to keep costs down. China accounts for about 2½ times as much supply as Sweden. For most of its products, the final assembly is performed by the end- user (consumer). Swedwood, an IKEA subsidiary, handles production of all of the company's wood-based products, with the largest Swedwood factory located in Southern Poland. According to the subsidiary, over 16,000 employees across 50 sites in 10 countries manufacture the 100 million pieces of furniture that IKEA sells annually. IKEA furniture uses the hardwood alternative particle board and Hultsfred, a factory in southern Sweden, is the company's sole supplier.[44] Product names[edit] IKEA products are identified by one-word (rarely two-word) names. Most of the names are Scandinavian in origin. Although there are some exceptions, most product names are based on a special naming system developed by IKEA.[45]
• Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs: Swedish placenames (for example: Klippan)
• Beds, wardrobes, hall furniture: Norwegian place names
• Dining tables and chairs: Finnish place names
• Bookcase ranges: Occupations
• Bathroom articles: Scandinavian lakes, rivers and bays
• Kitchens: grammatical terms, sometimes also other names
• Chairs, desks: men's names
• Fabrics, curtains: women's names