Shopping Centre
Ikea targets Ireland
Hugh Oram and Tina Calder look at the Swedish furniture giant's two-pronged assault on the Irish market
Published:  16 May, 2006
Page 8 

Ikea is known the world over for cheap but stylish furniture. And it is known for the ruthlessness with which it pursues a dominant position in every market it enters. With Ireland firmly in its sights, what impact will Ikea's entry to Dublin and Belfast have on the Irish retail and property markets?

The new store being planned for north Dublin should be open by late summer next year. The verdict of Fingal County Council on Ikea's planning application was delivered on April 20 and there's a month in which anyone can appeal to An Bord Pleanala. Depending on how the planning process goes, Ikea hopes to start construction work later this year.

The new Dublin store will have 30,500 sq m of retail space, on two floors, making it one of the largest of its stores in these islands. Only the Glasgow Ikea will be bigger.

Car parking will be an essential requirement, with 650 car parking spaces to be built under the store, while in total, the whole site will have 1,500 car spaces. The new store will be just off the M50 motorway close to Dublin airport and Ikea is expecting that 40 per cent of its trade will come at weekends, so that the new store won't interfere with the heavy weekday traffic on the nearby motorway.

The woman in charge of Ikea's new projects in Ireland, the new stores in Dublin and Belfast, is Theresa Daly, who's from a small village called Duagh, about eight km from Listowel in Co Kerry. She spent the first five years of her career as a stockbroker, first in Dublin, then in Vienna. Then about 12 years ago, she started with Ikea in Vienna, working on its eastern European sites.

She explains that the new Dublin store will have about 9,000 product lines, as well as teams of interior designers on hand in the store to advise customers.

"We're making the store very family friendly, so that families will be encouraged to make a day out at Ikea", she says. Customers are expected to travel to the store from all over Ireland.

The second floor on the new store will have a 500-seater restaurant, the largest in Ireland, which will serve food all day. There'll also be a café on this level for anyone who wants a quick cup of coffee or a snack.

Downstairs, just by the exit and aimed at people who're leaving after doing their shopping, will be a fast food outlet, where customers will be able to get hot dogs, ice creams et al.

Menus in the main restaurant will be strongly Swedish, but Daly says that most of the food will be sourced from local Irish suppliers. "However, we'll be bringing the meatballs in from our supplier in Sweden, as they're the only supplier that can give us exactly the taste that we and our customers want."

Another important facility in the new store will be a creche, as a very high proportion of shoppers are expected to bring their children with them. The creche will be free of charge to customers and the contract for it will be run by an outside specialist firm, yet to be decided. The store will also have baby-changing facilities.

The store will also be operating a home delivery service, not just for the many people who are expected to visit using public transport, but for people with cars who will still need to get purchases home. Ikea will also linking up with specialist kitchen installation companies in Ireland.

Altogether, says Theresa Daly, Ikea expects to employ about 500 people in the new store, between full-timers and part-timers. Other contracts to be placed include security and cleaning, while the new store will have substantial warehousing facilities.

The store itself will be in Ballymun, an area of public sector housing first developed in the 1960s. The whole area is currently being redeveloped into a brand new town and Ikea is working closely with the Ballymun Regeneration company. The ultimate aim, concludes Theresa Daly, is to create a brand new shopping destination in Dublin that's sure to attract high spending consumers from far beyond the greater Dublin area.

And IKEA plans to a similar transformation for shopping patterns in Northern Ireland by the end of 2006 with the opening of its Belfast store.

The retailer is currently awaiting planning permission to begin construction at the Holywood Exchange site in east Belfast.

With a planned store covering 25,800 sq m on two floors, approximately 1,100 car spaces and the creation of up to 500 new jobs Daly believes the store will offer customers an instant shopping solution.

"Thousands of Irish customers have been making the trip across the Irish sea to our UK stores since 1987 so we believed there was a considerable market for an Ikea store in Belfast" she says.

"The demand for household goods is very strong with the home furnishing market being driven by buoyant housing construction," she says, "and a high proportion of new households are first time buyers who need to decorate and furnish new houses and apartments often on a limited budget. The Ikea principles of quality and low prices are particularly suited to such a market."

The Belfast store is set to showcase its products in a unique layout which allows customers to view over 50 fully furnished room and home layouts showing the Ikea product range in place.

At present customers in Northern Ireland are forced to forward plan any redecoration or changes to their home due to delivery schedules of up to three months from some furniture and household goods stores.

The introduction of Ikea into the northern market will mean those same customers will be offered an immediate solution at competitive prices. It is also believed rival companies will be forced to reduce prices in a bid to keep their customer base.

When considering the site in Belfast bosses at Ikea didn't need much persuading following the success of the company's Glasgow store at Braehead. Daly says: "We believe the Holywood Exchange offers an ideal location for an Ikea store. It is the most feasible site available to us within Northern Ireland given the proposed scope and scale of our store and offers ample on site car parking.

"We also believe that our presence in this location will enhance the impetus for further development and private sector retail investment in this area."

Ever since it took space at the Belfast Ideal Homes Exhibition, Ikea at Braehead has been catering for customers traveling from Northern Ireland. Ferry company Stena Line has even cashed in on the phenomenon offering cheap travel deals to people going to the store.

On an average Saturday, at least 600 Ikea-bound shoppers will be aboard the first Stena ferry out of Belfast to begin an 18-hour marathon. That leaves four and a half hours' shopping time at Ikea, and they make the most of it.

An Ikea spokesman said: "We put on extra checkouts and on one Saturday, I counted 29 coaches. It's known as the Ikea trail, a phenomenal flow from Northern Ireland which is growing."

With over 1,000 willing to travel to Ikea Braehead each week it's little surprise the company is aiming to be opened in Belfast by early December this year to cash in on the Christmas trade.

In the meantime competitors throughout the north will have a choice: either come up with better service or compete on pricing if they are to keep customers once the world's biggest furniture retailer parks its tanks on their lawn.



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