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The pandemic has gone on so long and impacted our business in so many ways that we no longer call it a 'crisis' – it’s a constant. And we have learned to live with it.
Together, our 4,321 co-workers tackled one challenge after the other. While we still have a tough journey ahead, we are coming out of this pandemic with new resilience and strength. I have never been prouder of our team.
Our IKEA stores and shopping centres were closed for a record 83 days – longer even than the year before – and yet our co–workers continued to pack parcels and get products to our customers’ doors. When construction projects were closed, we worked side by side with partners to mitigate delays on our expansion plans. When the global shipping crisis pushed our stock levels to record lows, we adjusted our logistics and raced to keep pace with inquiries from customers.
We stood by tenants and ensured our meeting places remained a safe, fun day out as our communities opened up once again. And we launched new programmes to take care of our co–workers and communities.
This annual report celebrates some of the success stories from our last financial year – September 2020 to August 2021.
We opened two new IKEA stores, grew our e–commerce business, accelerated our digital journey, and welcomed 700 new co–workers.
We also refreshed our focus on sustainability and here, you can learn about the targets we have set for our business and the actions we are taking to create a positive impact on people and the planet.
We are thankful to the many loyal customers and partners who have stuck with us through this turbulent year. We look forward to continue building our relationship with you as our business and communities recover.
Towards a better future for us all.
Ikano Retail is one of 12 IKEA franchisees, creating a better everyday life for the many people in Singapore, Malaysia, Thailand, Mexico and the Philippines – with plans to open more markets in the years ahead. Our IKEA businesses offer well–designed, Swedish home and business furnishings at affordable prices. Our Ikano Centres, anchored by IKEA, are meeting places at the heart of our communities. We are the only franchisee owned by the family of Ingvar Kamprad, who founded IKEA in 1943.
Today we work in 6 markets with a combined population of 480 million people.
In a second pandemic year marred by closures, supply challenges and restrictions on retail operations in IKEA Stores and Ikano Centres, we opened new businesses and grew our total turnover in the last financial year. (That’s September 2020 to August 2021.) We are on a path to recovery from COVID impacts.
Our business in Malaysia shrunk dramatically in a year where stores and centres closed for up to 83 days. In Thailand, we also saw a decline as COVID concerns forced closure of up to 51 days.
Still, with e–commerce able to operate, two new store openings and strong growth in Singapore, we grew Ikano Retail’s combined turnover by 3.3%. Here’s a look at the performance in each of our operating markets in FY21.
21.2% to last year
13.9% to last year
3.3% to last year
Total Ikano Retail
3.3% to last year
During lockdowns and restrictions that lasted for months in some of our countries, IKEA served the many who focused on the things that matter most – family, health and home. From kitchens to bedrooms to workspaces, people continued to turn to IKEA for affordable solutions that made life at home more comfortable and functional.
Our customers were dining at home more than ever before, driving a 5% growth in our Cooking and Eating range. Our Workspaces range grew by 19% as many more people continued to buy desks, chairs, file cabinets and more to work from home.
We attracted more than 400,000 new members to our loyalty programme across five markets – more than half of them in our newest country, the Philippines.
Fans engaged on our social media in Singapore, Malaysia and Thailand as we launched an inclusive marketing campaign that won praise for featuring everyday people of all ages. (Media outlets took note in more than 100 articles!) People lined up to buy our first IKEA-branded collection – T-shirts, tote bags, hoodies and more.
At IKEA, we do market research a little differently than most. We knock on doors and connect with people in their homes. We made it our business to understand the needs and home furnishing dreams of the many people in our newest market, the Philippines. Take a look:
The pandemic continued to change the way people live and work at home. Our entrepreneurial teams launched several new ventures to meet the changing needs in our communities.
We know people need help to create their dream homes. That’s why we partnered with Livspace in Singapore to open our first external IKEA Planning Studio – offering interior design and home renovation services. We also opened a second studio in our IKEA Bang Yai store.
We relaunched IKEA for Business in Singapore, Malaysia and Thailand, meeting more than 1,000 small businesses looking to create spaces – offices, restaurants, classrooms and more – with all the comforts of home.
Across our countries*, entrepreneurial IKEA Food teams tested new concepts. Food Delivery services now bring meatballs to our customers’ door. We have Click & Collect food for people on the go, a Juice Bar, an Ice Cream shop and a vending machine with Swedish Bistro treats.
* Ventures vary in each country
Even in the face of COVID restrictions, construction delays and supply challenges, we secured our expansion projects and grew our business. We opened two new stores, entered a new country, secured construction of the biggest IKEA in the world and created 765 new jobs along the way.
We opened our first IKEA store in Mexico – home to 128 million people. IKEA Oceania recruited and trained hundreds of new co-workers on virtual platforms and welcomed the first customers by appointment, to keep people safe. Our Bedroom range was a hit, with MEISTERVIK, HEMNES and MICKE among the most popular purchases.
IKEA Jurong is a small store with big ambitions. At just over 6,000 square metres, this store goes big on digital solutions that showcase the full range, help our customers navigate our spaces and keep the kids entertained. All co-workers are multi-skilled and ready to process orders with mobile tablets.
We readied hundreds of co-workers and fit out IKEA Pasay City – the largest IKEA store in the world. At more than 66,000 square metres, this store is the size of 150 basketball courts. It includes a supersized fulfilment warehouse to support e-commerce operations. The store opened on 25 November, 2021.
We leveraged new technologies to serve our customers better, drive productivity, and inform our business decisions with deeper insight and data. Our stores introduced new digital touchpoints – from digital play places and way-finding tools to a new customer feedback system in our Showroom. And, behind the scenes, we are connecting the dots each day with a new integrated business system to improve our customers’ journeys and develop real-time data insights to improve performance.
Visits to our websites surpassed 100 million for the first time and a new shoppable IKEA app engaged even more customers. We fulfilled more than 864,000 online orders in four operating countries and sold a total of EURO 135 million through e-commerce.
Our Malaysia co-workers showcased our home furnishings in some of the first livestream shopping events for IKEA around the world. Meanwhile, our IPC shopping centre launched its own live shopping event with 35 tenant partners.
After 25,000 hours of tests, we piloted our new integrated business system in Singapore, simplifying everything we do. Stock updates are now paperless and immediate, so we know what’s in (or not) from port to shelf. And an integrated database makes it easier for online customers to get the products they love from cart to checkout – driving a 6% improvement in our checkout rates.
Our IKEA-anchored meeting places continued to serve our communities in Malaysia and Thailand, providing access to grocery stores, pharmacies and other essentials during pandemic lockdowns that lasted up to 83 days. To help businesses overcome restrictions, we on-boarded more than 300 tenant partners onto an online shopping platform and supported tenants in the food and beverage business by subsidising food delivery orders for customers.
As restrictions ease, we ensure our centres remain a safe place to shop and meet with loved ones.
At a time when many retailers were struggling to stay afloat, we supported our partners and maintained a healthy lease rate. Today, our five centres remain a hub of life in our communities – with more than 1,500 tenants, 429,000 square metres of leasable area as well as parks and recreation spaces.
In the midst of movement restrictions, we piloted multiple projects to connect our tenants with customers. We started a personal shopper service, opened drive-thru pick-up lanes and onboarded restaurants to a centralised app to take F&B orders – bringing many tenants online for the first time.
The prolonged restrictions impacted many in our developing communities – physically, mentally and financially. Our centres connected to food banks, rallied support from our tenants and arranged for donations to help families and hospitals.
Extreme heat. Rising sea levels. Increasing frequency of floods. Our communities in the global South are facing the impacts of climate change and the challenges of rising poverty and inequality. As part of the IKEA value chain, we have a big responsibility to develop a sustainable business, inspire our millions of customers to join in the movement toward sustainable living and create a positive impact in communities.
Our Ikano Retail People & Planet Positive Direction is line with the United Nations Sustainable Development Goals 2030. Last year, we refreshed our strategy with input from leaders across all our markets, set measurable targets, and committed to actions in business plans across all our stores and shopping centres.
We will help make sustainable living desirable and affordable in six countries that, by 2030, will have a combined population of 480 million people.
As an IKEA retailer, we have a big role to play in making sustainable solutions affordable for the many – not a luxury for a few. We leverage all our channels to share ideas for sustainable living and to influence positive change in our communities.
We are committed to moving as far and fast as possible to help IKEA reduce its global climate footprint.
IKEA measures the climate footprint created through its entire value chain. (Read more here.) As one among 12 IKEA franchisees in the world today, we are committed to doing our part by powering our properties through renewable electricity, embarking on the transition to Electric Vehicles for home delivery, driving towards zero waste-to-landfill and testing circular services.
We want to be a role model for diversity and inclusion in our markets, creating fair and meaningful work for people of different races, ages, religions, and sexual identities.
We are committed to developing local leaders and achieving gender balance, at all levels of our business. We champion women and children’s rights, create decent work for disadvantaged people in our communities and give co-workers a day of leave each year to contribute to a good cause.
We are proud of all that we have accomplished together with co-workers, customers, partners, government agencies and many others in our communities.
Tack! That’s Swedish for ‘thanks’ – and we thank you for being part of a most extraordinary year.
