IKEA: Mixing furniture and food into a bumper retailing proposition

IKEA: Mixing furniture and food into a bumper retailing proposition

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At the India Food Forum 2017, Country Food Head, , Henrik Österström spoke on food being a key component of the Swedish furniture maker’s retailing strategy and explained why the company also operates restaurants, serving great food in nearly every location that it is present in across the globe.

IKEA: Mixing furniture and food into a bumper retailing proposition
IKEA has 389 restaurants all over the world and sell food to approximately 650 million customers every year

“Food is a big part of the IKEA brand and the idea. Shoppers aren’t happy when they have an empty stomach. So the food business is very important because it’s a driver to our stores. It’s about the whole experiences,” said Österström.

An edited version of his address at the :

IKEA aims to create a better everyday life for the people. It is with this vision that we created our home furnishing business idea, which is to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. But then you ask yourself why I want to talk about food, and why are we talking about food at all? The reason for our association with food goes back quite some time. As far back as in 1959, when we opened the first store in a small village in south Sweden, our founder had said: “It is difficult to do business with hungry customers.” His observation is valid even today when we have huge showrooms in various markets across the world.

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Back at that time, our founder realized that people used to leave the store after shopping for some time. They did not come back because they went out to have something to eat. So the idea was born that we need to have our own restaurant to keep the people in the store and to give them something nice to eat.

Now, let me talk a little bit about IKEA food. It represents 5-6 per cent of IKEA business totally. We have 389 restaurants all over the world and we sell our food to approximately 650 million customers every year. So, in that sense, we are quite big. But we do this with one purpose – it is to attract people to the store and it is part of our retailing concept, of course.

In India, our store and restaurant will be launched in Hyderabad where we will become operational this year itself and then open the next store in Mumbai. We have an expansion plan for about 25 stores all over India by 2030.

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Coming back to why is it mandatory for IKEA to have a restaurant, I have answered it partly, which is that it is part of our core concept. Our restaurants help attract visitors to our stores. Another reason is that the restaurants strengthen the Swedish profile of IKEA stores. A part of our range is to strengthen the Swedishness of IKEA and we do it with our food. This also helps us to be part of a family and divide the profit evenly. Then of course, we ought to have something for our visitors who come to our store. Many of us love to have local food, so in every store we serve both the local and the global cuisine. We also aim to support low price of food and our food comes at the lowest price possible.

Then there are other reasons like building trust for the brand among customers, co-workers and suppliers. We would like all our visitors to have a great food experience, because that helps to build trust in the brand, overall. Our plan for India will be the similar to what we have all over the world, and that is to have two different kinds of places for experiencing our food. The format that we stick to is to have a big restaurant and a café as well. Having this kind of a format fulfills two purposes – you can go for a quick bite at the café when you are leaving the store and also get some local food and Swedish specialty at the restaurant. All of the products at our restaurants are organic and certified too.

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Talking of our food range, it will have a Swedish feel but also an Indian appeal. It will be a well-blended fusion mix. For example, we will sell biryani and dal in Hyderabad, but we will also have Swedish specialty. High quality with affordable price is what IKEA food is all about and that will be the case in India as well.

As far as our food suppliers are concerned, we not only look for the quality and organic food, but we also keep the environment and social responsibility in mind. We look out for these attributes in our suppliers as well. Animal welfare, carbon footprint and the labeling of packaged food are important concerns that we will be looking at.