One of the most common questions I hear is, ‘Is IKEA coming to…[my town]?’ In fact, IKEA USA’s Facebook page recently devolved into a request fest as seen above. So, is there a possibility that IKEA will be coming to your town? Although there are no new IKEA stores planned for opening in the US in 2010, Joseph Roth, US Director of Public Affairs for IKEA says,
“IKEA is continuing to explore opportunities to develop new markets and add additional stores to existing markets.”
I had the pleasure recently to speak with Mr. Roth, and I asked him about IKEA’s criteria for choosing where to build new IKEA stores, as well as how they go about siting a store and determining the market for a new IKEA. Read on for Mr. Roth’s insights and my predictions on where IKEA is coming next, including specific answers about whether IKEA is coming to [your town]!
See also: IKEA’s Expansion in the Midwest and
next week: The Top Three ‘In-Demand’ Markets
Criteria for a New IKEA Store
In general, IKEA prefers to open additional stores in successful existing markets over opening a new store in an unproven market. So, for instance, IKEA is more likely to open an additional store in the Detroit, MI area to complement the existing Canton, MI store, than to open a new store in St. Louis, MO (though I think these are both likely locations – see below for more info on Midwest store potentials). It’s a market area that is proven and the population density is such that it can support another Detroit area store.
IKEA’s Store Location Criteria
- Population Density: The most basic requirement for a market is population. IKEA’s market research calls for a minimum of two million people within about 40-60 miles of a single media market. Statistical data from the US Census is used to determine whether a market is viable simply on the grounds of population density. Metropolitan Statistical Areas may be used as long as the population is in one media market.
- Per Capita Income: Although it is widely speculated that there is a minimum per capita income for a viable IKEA market, I haven’t been able to put my finger on a number.
- Brand Awareness: IKEA looks for a brand awareness in a potential market, plus both local city and community support for an IKEA is an important factor.
- Single Media Market: IKEA prefers an area where the population is in one major media market so that radio, television and newspaper ads can be targeted to one market.
Dispelling Myths about IKEA’s Criteria
- University Cities: Despite public belief to the contrary, IKEA does not favor cities with a University presence when choosing a location for a new store.
- Port Cities: Although IKEA is committed to reducing costs associated with distribution, IKEA does not favor port cities in selecting new store locations.
- Transient Military Population: Another common assumption is that IKEA would favor cities with a high transient population, such as a highly military area – not true.
Is IKEA Coming to [My Town]?
First and foremost, let me say that what follows are some facts about cities that are frequently mentioned by IKEA Fans accompanied by my GUESSES. Educated guesses, yes – but guesses nonetheless. I have no word from IKEA about any of these locations specifically and IKEA will not confirm nor deny, nor engage in speculation about potential future sites for IKEA stores. I’m sure I’m also missing a bunch of markets in my analysis below, but there’s only so much time in the day…
Likely Future IKEA Locations
- Las Vegas, NV – The metropolitan Las Vegas population was estimated at 1,836,333 in 2007 – not enough to support an IKEA store. Additionally, because many people own second homes in Las Vegas, the population statistics may not be an accurate representation of actual residents. Also, per capita income reported may not reflect an accurate area income average due to underreporting of income. Ahem. My guess? Las Vegas could be on the table in the next 10 years, but probably in the latter half.
- Dallas, TX – The population of Dallas, TX is approximately 6.3 million. IKEA currently has one store in the Dallas area, in Frisco. My guess? IKEA will locate at least one, possibly two more stores in the Dallas area in the next ten years, and one of those within five years. My bet is on the Fort Worth area first.
- St. Louis, MO – This city of over 2.8 million is a prime candidate for an IKEA store. The closest store is in Bolingbrook, IL and is 275 miles away; the next closest store is West Chester, OH at 350 miles. My guess? Of all the new market potentials in the Midwest, I see St. Louis as having the greatest chance of getting an IKEA store in the next five years.
- Atlanta, GA – The Greater Atlanta Metro area population was estimated at 5.37 million in 2008. IKEA Atlanta opened at Atlantic Station in downtown Atlanta in 2005. My guess? IKEA will look at siting a new IKEA in Atlanta to the south, near the Hartsfield-Jackson airport in the next five to ten years.
- Detroit, MI – With a population of over 5.35 million and a successful existing store in Canton, MI, I think Detroit is potentially a key area for IKEA. My guess? IKEA will look to site another IKEA store in the Detroit Greater Metro area within five years.
- Phoenix, AZ – The Phoenix Metropolitan Area is home to nearly 4.3 million people. With a store in Tempe, AZ already, IKEA has market penetration and brand awareness. My guess? Phoenix will gain another IKEA store in the next ten years, maybe to the west near Avondale?
Market Areas That Might Stand a Chance (but not now)
- Indianapolis, IN – Indianapolis has a current metro area of about 1.7 million. It’s only about 2 hours from the store in West Chester, OH, and in my opinion is not high up on the list of possibilities for an IKEA store. Maybe in 8-10 years?
- Hampton Roads, VA – This area has a large military presence, hence population, but still only comes in at about 1.7 million. The next census numbers might change that, but until then… Not likely (this one I actually have on good authority).
- Upstate NY – There’s not a combined media market in upstate NY that serves more than 2 million in a metropolitan area. Buffalo, Rochester and Syracuse are in three separate media markets and although together their population is well over 2 million, over 150 miles separate them. Best plan to drive for a while…
- Milwaukee, WI – Too close to the Chicago area stores (Bolingbrook, IL and Schaumburg, IL) and too small a population to support an IKEA makes Milwaukee an unlikely candidate for an IKEA store location. 95 miles makes it a daytrip, which I predict it will be for the long-term.
There are too many other areas to list that might be a potential IKEA market. IKEA is constantly exploring opportunities to expand in existing markets and enter into new markets, so there’s always a chance if the basic market requirements are met. If you have questions about your city, ask and I’ll attempt to look into my crystal ball…
Market Areas That Don’t Stand a Chance
- Alaska – Moose are not generally good with allen wrenches. Just kidding! The entire population of the state isn’t sufficient to support an IKEA store.
- Hawaii – The total population of all the Hawaiian islands in 2008 was estimated at 1.28 million. Not a chance.
- Richmond, VA – The Richmond Metropolitan area is only 1.2 million as of 2008. Though well situated along major interstates, the driving distance to the nearest store is less than two hours. No time soon.
- Anywhere in Maine or Connecticut (edited! Meant to say…) New Hampshire - Not happenin’. Grow some.
Again, these are only my own personal predictions. Mr. Roth will neither confirm nor deny any rumors, so until he issues a press release, these may be the best guesses anyone has. ;)