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IKEA Restaurants: Have they tasted success in India?

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Swedish furniture major , which has recently opened its 400,000 sq. ft. debut outlet in India, features a 1,000-seater restaurant, the brand’s largest in the over 400 stores it has globally. So, why does a furniture giant–and an immensely successful one at that–have restaurants? The idea behind offering food options was that once you feed customers, they stay for longer.

IKEA’s restaurants worldwide contribute significantly to the brand’s revenue. It’s a sure shot way to lure customers in, especially in a country like India where food is an integral part of the culture.

IKEA restaurants worldwide are known for their meatballs–so much so that the meatball meal comprises of 20-25 percent of their total restaurant business. The business is so good that the brand is now working consciously towards introducing healthy foods, for instance, they have reduced the sugar content in their drinks.

Highlights of the menu straight from their Swedish cuisine include salmon, cinnamon buns, croissant, blueberry jam and cloudberry. For India, the furniture giant created a menu more customised to the Indian palate, replacing their signature traditional Swedish meatballs dish with chicken and vegetable balls.IKEA also serves various local dishes like Hyderabadi Biryani, Dal Makhani and Indian breads to name a few for their Indian audience. The offerings suit all wallet sizes for example, the vegetable biryani is priced at Rs 99, chicken meatballs at Rs 149 and veggie balls at Rs 129.

Talking about how the restaurant has fared in India over the past six months, , Country Food Head, IKEA India says: “The food range comprising of veggie balls, chicken balls, salmon, Indian dishes, pastries and low-sugar drinks along with coffee, has been well received from consumers.”

“The twists and tweaks that we make to the menu are necessary to make things better in our operations and to run such a large outlet with 1,000 seats, it is necessary that we keep updating ourselves as per consumer demands. We have ensured that the food is affordable, of high quality and of good taste. We call it Swedish-feel Indian-appeal,” he states.

What’s New?

The brand has recently added Indian curry to the menu and the response to the new dish has been tremendous, claims Österström, saying that they are planning to add a few paneer dishes along with expanding their kids range as well.

“To expand this type of restaurant, just expanding the food range won’t do, because that would slowdown operations. This means when we add something new to the menu, we also need to take something out from the menu to create a balance,” he says.

Promotional Activities

Aside from menu expansion, IKEA also plans seasonal activities to be carried out at the restaurant to attract more people and expand its consumer experience. For instance, recently, the they organised a promotional activity in the restaurant to check its kitchen possibilities.

Talking about the activity, Österström says, “From December 20, 2018 – January 20, 2019, we carried out a promotional activity ‘‘Eat As Much As You Want’, where you pay for one dish once and can take as many refills as you want. The activity was super successful among customers.”

Free refills are usually seen as a good way to attract customers to an establishment, especially one where food is not their primary source of income.

Placement In-Store

Since the stores are huge and it takes approximately 90 minutes to simply walk through the IKEA Hyderabad store, the restaurant is located in a place where consumers are expected to be tired after a long trek. This kind of placement of restaurants in IKEA is consistent in all its outlets all over the world.

The consumers take pause after a long walk through the furniture section, are hungry, sit and eat and then, after regaining their energy, they enter the next phase of the store–ready to shop at IKEA’s market hall. A second long walk later through the Market Hall and checkout, customers find in front of them a cafe for refreshments. Here they get a wide range of cookies, chocolates and other delicacies. A samosa costs just Rs 10 while frozen yogurt, which tastes like soft serve ice cream, is also available at the same price. “Our overall ambition is to be super affordable and that we have already proved in Hyderabad by serving unlimited coffee in just Rs 35,”explains Österström.

The Self-Service Strategy

IKEA has self-service restaurants throughout the world, right from picking up trays and trolleys to collecting food and later leaving the trays and trolleys at designated points. The service is quick as customers collect their orders in a couple of minutes while moving in the queue along the food counters and the billing is done while they are heading towards their tables.

“A lot of people have understood how the restaurant works right from standing in the queue, picking up the food items to the checkout process,” says Österström. The brand’s food suppliers are expected to provide quality food as well as organic food items, while keeping social responsibilities as well as the environment in mind. Animal welfare, carbon footprint and the labeling of packaged food are important concerns that IKEA works towards diligently.

The Way Forward

IKEA is planning to open second store in Mumbai in October 2019, followed by stores in Bengaluru and Delhi-NCR. “We are planning to more or less copy paste the same concept with a few differences in other cities. We will have approximately 1000-seater restaurants in all our stores in India over the coming few years,” says Österström.

“In our upcoming Mumbai outlet, we will be serving some mandatory dishes that have been proven successful. Apart from this we have plans to add vada-pav on the menu,”he adds.

The brand will stick to its format of a big restaurant and a café in all the cities that it’s planning on launching stores in. Having this kind of a format fulfills two purposes–customers can sample local food as well as Swedish specialties at the restaurant and then have a quick bite plus coffee before the leave the store at the end of a long and fulfilling shopping day.

Globally, restaurant business contributes 5-6 percent of IKEA’s sales. The brand has 390 restaurants all over the world and sell food to approximately 650 million customers every year.

“In India, currently, food is contributing between 5 to 10 percent of IKEA’s revenue,” Österström concludes.