At an investment of NIS 100 million, IKEA today began operations at its new Beersheva branch, the chain's fourth in Israel. The store, which has 22,000 square meters of space in two sales halls, will be opened to the public on February 26. IKEA is predicting that 800,000 people will visit the store and buy over three million items there in 2018.
Like the chain's other branches, this branch will feature a dairy restaurant and a meat restaurant in addition to its display and sales halls. There will also be a store selling Swedish food and a children's area (so that the parents can shop undisturbed). The new store will have 380 employees, 39 display rooms, and three sample homes. There will also be 21 cash registers, eight of which will be self-service, and 1,500 parking spaces.
IKEA has 403 branches in 40 countries. According to the company's figures, 936 million people visit its stores and 2.3 million people surf its websites each year.
IKEA first set up business in Israel in 2001, opening a branch in Netanya. The branch burned down to the ground 10 years later, and was rebuilt. A second IKEA store was opened in Rishon Lezion in 2010, and a store was opened with a slightly different concept in Kiryat Ata in 2014, being part of a shopping center. The Rishon Lezion branch is the largest of the three, followed by the Kiryat Ata and Netanya branches.
IKEA Israel CEO Shuki Koblenz calls the Beersheva branch a conceptual one. It is slightly smaller than the other IKEA branches in Israel, but thanks to its utilization of space, it has the same selection of products from the IKEA catalogue.
"Globes": Will the Beer Sheva branch take business away from the Rishon Lezion branch, which is IKEA's most active branch in Israel?
Koblenz: "The Rison Lezion branch services many communities around it in an area with three million residents. The traffic we anticipate at the Beer Sheva branch will also be at the expense of the Rishon Lezion branch, but not to any great extent."
IKEA is planning a fifth branch in the Jerusalem corridor.
Koblenz adds that IKEA's prices, including those for the catalogue that will distributed around September, reflect the same decrease as in the previous catalogue. "The 2018 catalogue, was distributed in September after being printed in April, and the prices in it were finalized in February. We're already working on the next catalogue, which will also feature lower prices," he remarked.
Will the prices at the branches in Jordan and Egypt, which are closer to the Beer Sheva branch, be substantially cheaper?
"That's absolutely untrue. The prices in Jordan and Egypt are not cheaper."
When will IKEA launch a sales website for Israeli consumers like the ones it has in other countries around the world?
"In our overall considerations, we're aiming at the fifth branch, while also considering online sales in Israel. We have launched a pilot sales portal in some countries, meaning the integration of IKEA in a broad sales platform. Three pilots are operating on the Tmall platform active in China, Hong Kong, and Taiwan. We're selling all of IKEA's products on the website there, not on an independent website."
With Amazon's entry into Israel, will you use it to offer IKEA products for sale through it?
"We're starting a pilot with Amazon in the US for smart home products. Another pilot currently under consideration is with Samsung and Apple for the sale of complementary products for mobile phones through those companies' websites. These pilots naturally take time, and as soon as we see what consumers think of it and what is actually involved, we'll also consider entering Israel on a similar format."
Will we see IKEA branches opening on the Sabbath?
"This is something that will never happen. We work until midnight on Thursdays, and open the stores on Saturday night. Both our employees and our buyers have to rest and enjoy their Sabbath."
IKEA's branches in Israel have a total of 1,750 employees. 6.2 million customers visited IKEA's Israeli branches in 2017, and 13 million people a year surf the IKEA website, on which they can see the variety of prices without buying online.
IKEA's global sales totaled €34.1 billion in 2017. The company's worldwide turnover in food sales was €1.8 billion. IKEA has 149,000 employees worldwide, and lists 9,500 different items in various departments in its catalogue.
IKEA founder Ingvar Kamprad died a month ago at the age of 91.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 18, 2018
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