IKEA article - BDC Magazine February 2014

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THE MAGAZINE FOR THE CONSTRUCTION INDUSTRY

BUILDING DESIGN &

CONSTRUCTION ISSUE194

FEBRUARY 2014 ISSUE 193

FEBRUARY 2014

IKEA

YELLOW, BLUE AND GREEN BUILDING DESIGN & CONSTRUCTION

IKEA is the first big UK retailer to start selling solar panels but its vision doesn't stop there

TIDEWAY

THE COMPLETE ASSET AND PROPERTY MANAGEMENT SERVICE

CLARKE ENERGY ENGINEER, INSTALL AND MAINTAIN

LONDON BOROUGH OF HAVERING HOMES AND HOUSING

ALSO INSIDE: MAKE YOUR MOVE WITH TSP

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IKEA BECAME THE FIRST BIG UK RETAILER TO START SELLING SOLAR PANELS BUT ITS VISION DOESN'T STOP THERE. BDC MAGAZINE CAUGHT UP THE SWEDISH FLATPACK LEGEND TO FIND OUT MORE.

KEA is the world’s leading home furnishing retailer, operating a total of 298 retail outlets in 26 countries/territories around the world. As one of the most recognisable brands, its stores are visited by 690 million people every year. In the UK, IKEA has 18 stores with one in Ireland. Experiencing sustained growth in recent years, the company has continued to expand and invest in its estate with an emphasis on renewable energy to power its stores. Last year, IKEA produced enough renewable energy to provide 34% of its total energy consumption. By 2020, its target is to produce enough renewable energy as consumed by total operations.

Most recently, IKEA bought a wind farm in Ireland to power its stores in Dublin and Belfast. The facility’s four turbines will generate 25,000 megawatthours (MWh) of electricity. Indeed, few retail compa-

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RETAIL SECTOR: IKEA nies are as directly engaged in self-supplying their renewable energy as IKEA. The new addition brings IKEA’s windmill facilities to over 100 across Europe.

Indeed, across Sweden it now has seven turbines producing 72,000 MWh of wind energy. With plans to increase this by 2015, IKEA will be producing enough electricity in Sweden alone to supply approximately 48,000 homes. Wind energy complements the company’s use of solar PV which is currently installed on 39 of its 44 facilities in Europe.

IKEA is also encouraging its customers to live a more environmentally friendly lifestyle with the introduction of electric vehicle rapid charging points across its 18 UK stores by the end of the year.

Research conducted by the retailer revealed that one in six Britons would be encouraged to switch to an electric car if more charging points were available across the UK. IKEA is working with its sustainability partners, car manufacturer Nissan and green energy provider Ecotricity, to introduce the dedicated rapid charging points in all of its car parks so customers can confidently charge their vehicles while shopping in store.

Developed by Nissan, the rapid charger units can recharge an electric vehicle, such as the 100% electric Nissan LEAF, from empty to 80% full in just thirty minutes and IKEA will be the first major retailer in the UK to make them available to its customers. The charging points will be free for all customers to use and there’ll be no charge for the 100% sustainably sourced green electricity from Ecotricity.

IKEA has long taken the lead in developing and promoting products and solutions that help its customers save or generate energy, reduce or sort waste and use less water – all at the lowest possible price. Working alongside Nissan and Ecotricity, IKEA has installed the network to help strengthen rapid charging infrastructure in the UK and make zero emission driving a more practical and viable option for its customers.

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Electric vehicles are a key part of IKEA Group’s sustainability strategy to produce as much renewable energy as it consumes by 2020. To get closer to that goal, the IKEA Group has set aside €1.5bn for investments in renewable energy up to 2015.

IKEA UK has had hybrid vehicles as part of its delivery fleet for over six years and has a number of Nissan’s 100% electric LEAFs on loan as it looks to explore building a fleet of zero emission vehicles.

The Nissan LEAF is the world’s best-selling electric vehicle and Nissan is working with IKEA stores across Europe to grow rapid charging infrastructure overseas.

Joanna Yarrow, head of sustainability IKEA UK and Ireland said, “At IKEA we believe electric vehicles have a significant part to play in a more sustainable future. We know that our customers want to live more sustainably and that extends to how they get to and from our stores. By installing more charging points and strengthening the infrastructure nationally, we believe we can start to tackle one of

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IKEA invests in a wind farm: Eddie OConnor, Chief Executive, Mainstream Renewable Power, Joanna Yarrow, Head of Sustainability IKEA UK and Ireland, David Gascon, Head of Electricity at Vayu

the major barriers to using electric cars which is the fear of not finding a convenient place to charge the car.”

This commitment to producing its own energy, and helping customers do likewise, is running concurrently with an expanding estate. Most recently in the UK, plans were unveiled for a new store in Sheffield which will provide jobs and boost the local economy. The new 37,000 square metre store would sell the full IKEA range of products, comprising of 9,500 articles, and would create up to 400 jobs in a wide range of different roles, including positions in customer relations, sales, interior design, IT, sustainability, marketing and the IKEA restaurant. The company will work with local employment agencies to ensure that local people benefit from the jobs created.

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Ian Nicholson, IKEA Sheffield Project Manager, said: “An IKEA store in Sheffield will be a major boost to the whole city, not just in terms of jobs, but also by adding to the total retail offer. As is the case in cities across the UK, our store would complement, not compete with, the city centre retail offer.”

In order to develop a store in Sheffield, IKEA needed to find a site that was large enough to accommodate everything you find in a usual store, such as the showroom, market hall and warehouse, along with the restaurant, crèche, staff facilities and customer service areas. Importantly, it also needed to be well-located close to a major road network and public transport in order to minimise the impact on local residential communities.

Having reviewed a large number of potential sites across the city, including some within the city

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RETAIL SECTOR: IKEA centre itself, the site on Sheffield Road was identified as the only one to meet all of IKEA’s requirements and is also well-served by public transport, making it easy to access from the City Centre.

In 2012, IKEA was granted planning consent from West Berkshire Council to build its 19th store in the UK. The outlet in Calcot, Reading will be built on a four-hectare site of commercial land comprising a number of retail and leisure units some of which are vacant and in a poor state of repair. The development will consist of a retail warehouse and an adjacent multi-deck parking area. There will be a total of 1,259 parking spaces as well as additional bus and coach parking areas.

The development will bring over 400 job opportunities, representing a significant increase in employment on the Pincents Lane Retail Park.

Available roles will range from sales, interior design, logistics, restaurant, customer services and warehousing to outsourced services. IKEA also provides opportunity for unskilled, skilled, training for managerial positions and for working internationally. It will also support the construction industry with up to 1500 jobs during the store build.

Furthermore, it is IKEA’s ambition to make the Calcot site the greenest store to-date with technol-

IT IS IKEA’S AMBITION TO MAKE THE CALCOT SITE THE GREENEST STORE TO-DATE

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ogy such as solar heating, photovoltaic panels, biomass regeneration and rainwater harvesting being incorporated into the design. Installing energy efficient measures across its property portfolio has helped reduce energy consumption by 19%. Since 2005 the company has opened six new stores with only a 10% increase in combined energy. On average, stores across the UK and Ireland recycle over 85% of waste with some stores achieving around 95%, benefiting the environment and reducing the operational impact of the store.

Jack Jackson, IKEA’s Project Manager for the IKEA Reading store, said the company had put tremendous effort into the compilation of appropriate plans and studies to support its application.

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“We have shown how IKEA would contribute to the local economy and jobs market in West Berkshire and Reading and we look forward to working with the people of that area in developing and operating our store.”

Another new store is planned for Sandy Park in Exeter. Leader of the city council Councillor Pete Edwards said the development was a very “big deal” for the region, underlining “the tremendous progress we have made in confirming Exeter as a place open for business.”

He added, “As with John Lewis, the city has been working for many years to attract IKEA. It is one of the few brands – John Lewis being another – which draws spending from a very wide

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catchment area. There is a lot of work to be done to address planning and transport considerations but we look forward to working with IKEA in the coming months.”

Derek Phillips, vice-president of Exeter Chamber of Commerce, said: “We are obviously delighted that IKEA has chosen Exeter. It reaffirms our position as the retail hotspot of the South West, following the redevelopment of Princesshay and the arrival of John Lewis. It's another boost to the Exeter economy, and a sign of confidence in the city from iconic names like IKEA and John Lewis. Hundreds of new jobs are always good news, especially in the current climate.

“IKEA has looked at a lot of other places around the West Country but has chosen Exeter, which is great. They have been talking to planners about a number of sites for several years. Of the sites they have been looking at, I think this is the one where shoppers are most likely to go on to spend money

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at other retailers in the city, due to its location and transport links.”

ONWARDS AND UPWARDS Ikea announced this month that its total sales of £1.268 billion for the financial year ending August 2013 showed a 3.1% increase over 2012. IKEA’s position as the market leader was further strengthened as market share grew by 0.2% to 6.4% in a year where the company celebrated its 25th birthday.

“We have worked hard to put a renewed focus on the customer over the past year, understanding how they live, their needs, dreams and wants in the home as well as learning about how they want to shop with us, in order to offer them the best value for money home furnishings,” said Gillian Drakeford, IKEA UK Retail Manager. “With the continued uncertainty around the recovery from the recession, we have continued to invest across our online and in-store shopping channels to create a

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RETAIL SECTOR: IKEA simpler, more convenient and enjoyable experience and it’s very humbling that our efforts have resulted in another year of growth.”

A high level of growth was achieved through online sales, with an increase of 29% compared to financial year 2012. This was achieved after IKEA increased the number of products available to buy online to 7,500, 80% of the total range, as well as making the service available to the majority of Scotland.

The possibility to purchase through the mobile IKEA website was also offered towards the end of the year to give customers more choice in how they can shop with IKEA. With the launch of free wi-fi in all stores, a purchase can now be made direct from a mobile device while browsing in-store.

Elsewhere, an investment of £4 million was made to rebuild all Living Room and Children’s IKEA departments across the country, which resulted in an immediate return on investment as sales in both areas rose by 6%. As part of the rebuild process, over 500 visits were made to customers’ homes to understand the challenges, needs and dreams of the people living close to IKEA stores. The knowledge gained in these home visits was then used to redesign the display roomsets in the two departments, showcasing the IKEA range with local customer relevance.

In addition, IKEA made the decision to sell only LED lights from 2016, a technology which consumes 85% less energy and lasts 20 times longer than traditional incandescent bulbs. This was quickly followed by a £1.1 million investment to reduce the price of LED bulbs to be the lowest price in the UK, starting from only £4 per bulb. With the

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A HIGH LEVEL OF GROWTH WAS ACHIEVED THROUGH ONLINE SALES, WITH AN INCREASE OF 29% COMPARED TO FINANCIAL YEAR 2012

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average house in the UK containing 28 light bulbs, the total annual household cost saving of switching from incandescent 40W bulbs to the corresponding LED bulbs is over £100 per year. The Lighting category saw growth of 10% over the year.

However, the biggest success was seen in the Outdoor Furniture category, up 58%, as IKEA offered the range during the whole year, a move away from only selling during the spring and summer, as well as launching the first integrated marketing campaign dedicated to the category.

A series of new limited edition product ranges

were also launched throughout the year to give customers further inspiration and reasons to visit, including the STOCKHOLM, NATVIDE and TRUE BLUE collection, resulting in an uplift of the number of visits to the store by 2.8% over the year.

Gillian Drakeford continues, “By focusing on understanding our customers, their shopping needs and behaviours as well as being as relevant as we can with our home furnishing product offer, we have built a great foundation for strengthening the perception of the IKEA brand in the UK to

“WE HAVE BUILT A GREAT FOUNDATION FOR STRENGTHENING THE PERCEPTION OF THE IKEA BRAND IN THE UK TO DELIVER SUSTAINED GROWTH”

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RETAIL SECTOR: IKEA deliver sustained growth. The medium-term picture for the home furnishing market looks bright and I believe this, coupled with our investments to improve the shopping experience, gives us the opportunity to double our turnover and total market share by 2020.

“Over the coming year we will be putting a renewed focus on our kitchens business, making IKEA the most simple and convenient retailer to buy a kitchen as well as the best value for money in the market. We will invest £8 million in improving the kitchen business, including rebuilding all showrooms, staff training, improving our delivery and installation services as well as offering a completely redesigned kitchen system.

“We will also continue to develop our multichannel offer as we look to give customers a seamless journey from online to in-store. Finally, we have a real passion and desire to be the standout brand that enables consumers to live a more sustainable life in their home. Therefore we will be investing to promote the extensive range of products we sell that will enable them to save and generate energy, save water and reduce waste and will ultimately help them save money. This includes rolling out our collaboration with Hanergy to offer the lowest price solar panels in the country to all UK stores by the end of the year and encouraging customers to use our furniture take back scheme.” www.ikea.com Tel: 020 3645 0000

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“WE HAVE A REAL PASSION AND DESIRE TO BE THE STAND-OUT BRAND THAT ENABLES CONSUMERS TO LIVE A MORE SUSTAINABLE LIFE IN THEIR HOME’

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