IKEA is set to close seven of its large-format furniture stores in China as it responds to weak consumer demand, a prolonged property downturn, and increasing competition from domestic retailers. The closures will affect locations in major cities including Shanghai, Guangzhou and Tianjin, with operations ending from 2 February, according to a company statement.
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As part of a strategic shift, the Swedish home furnishings retailer plans to focus on smaller-format outlets. Over the next two years, IKEA intends to open around a dozen compact stores in Beijing and Shenzhen, reflecting changing shopping habits and lower footfall at traditional out-of-town sites.
The move underscores the challenges facing international retailers operating in China amid subdued housing activity, which has dampened demand for home furnishings. Local competitors have also intensified pressure by offering faster delivery, lower prices and products tailored to Chinese consumers.
The store closures mark a significant adjustment to IKEA's long-standing expansion strategy in China, signalling a pivot towards more flexible retail formats as the company seeks to maintain its presence in a highly competitive and evolving market.
Source: www.bloomberg.com
