Ikea challenge to UK stores

The Swedish furniture chain has now started trading in Warrington, Cheshire, Its second store will open in Neasden, near Brent Cross.

Analysts are divided as to who will be hardest hit by the longawaited arrival of Ikea, but all are agreed that existing furniture businesses will notice the new competition.

IKEA has been studying the UK market for many years and actively looking for sites since 1984.

Because of the difficulty in finding the large-scale sites it requires, with good communications and big catchment areas, there are no other stores in the pipeline.

Started in 1958, it now has stores in 19 countries and turnover of £10.7bn a year.

Its Scandinavian- look furniture is coupled with a very keen pricing policy that means IKEA could pose a major challenge to Habitat and MFI.

“It will take them at least ten years to build a chain of any size in this country. n says Paul Smiddy, retailing analyst at stockbrokers Wood Mackenzie.

“But store by store IKEA could hit a nearby MFI or Habitat.”

IKEA is relying on pulling in customers from a wide catchment area. Its development team calculate that there are 6.5m people living within 30 miles of Warrington with both the M6 and M62 close by.

Similarly the London store will tap into the huge market around the North Circular Road.

IKEA stores sell mainly flatpack furniture. Delivery is charged for, but the company aims to keep delivery waits to the minimum: sofas covered in customers’ choice of fabric can be delivered within a month