IKEA is shifting towards a more flexible growth model in Greece, Bulgaria and Cyprus, with smaller stores, a stronger e-commerce offering and greater emphasis on investment efficiency. Its targets are average annual sales growth of 6.5% through 2029 and an increase in its operating profit margin (EBIT) to 9.1%.
The plan presented at the Fourlis Group’s first Investors’ Day calls for five new stores by 2029, each covering 2,000-4,000 sq m, as well as upgrades to existing locations. Management is opting for measured expansion, as finding suitable properties remains a key constraint.
IKEA currently has 21 sales locations in the three countries, including 12 in Greece, seven in Bulgaria and two in Cyprus. Its network welcomes more than 12 million visitors a year, while its digital platforms record 30 million visits.
According to management, stores of 2,000-4,000 sq m can display almost 80% of IKEA’s roughly 5,000 accessory product lines, while retaining the experience of its larger stores. Plans include a new store in Corfu, while in Bulgaria work is under way to expand the Plovdiv store by 1,000 sq m and relocate the Burgas location.
Gaining share in a shrinking Greek market
The expansion comes as Greece’s furniture and home furnishings market contracts. According to GlobalData figures presented by management, the market fell 1.4% in the eight months to August, compared with growth of 3.4% in Bulgaria and 2% in Cyprus.
Despite weaker demand, IKEA increased its share in Greece by 0.3 percentage points, to 17.3%. It lost 0.2 points in Bulgaria, while gaining 0.1 points in Cyprus. Management expects the Greek market to end the year at the previous year’s level, supported by seasonally strong demand in the final four months of the year and an intensive promotions programme.
IKEA’s performance in Greece remains significantly higher than the chain’s global average market share of 5.5% and its European share, which is close to 10%. Alongside new stores, IKEA is investing in services that extend its commercial reach without the need for physical sales locations.
In Bulgaria, the IKEA on Wheels service, which allows customers to collect online orders from trucks in cities without a store, already accounts for 15% of online sales.
Plans also include developing new collection points, entering the quick-commerce market for accessories and increasing sales to business customers. In B2B, the company aims to build on its presence in the short-term rental market and expand further into the construction sector, where it currently has a limited share.
On the customer service front, the company is promoting faster deliveries, enhanced click & collect services and remote kitchen planning, enabling customers to complete their purchase without visiting a store. A new AssemblyPlus service, offering same-day delivery and assembly, is also planned.
Upgrades to existing stores, which are not included in the programme of five new locations, are expected to contribute €30 million of the projected €80 million increase in total sales.