Ikea to invest €1billion in Spain

Ikea to invest €1billion in Spain

Following in the footsteps of many other international companies, Ikea is betting on Spain as a key pillar in its expansion strategy.

As the county’s economic recovery continues, domestic demand is improving. Householders are once again doing the kind of spending which dropped sharply during the peak crisis years.

In late September, Ikea announced plans to invest €1billion in Spain and create 1,700 direct and 14,000 indirect jobs by 2020.

In a country where the unemployment rate remains persistently high and Spaniards of working age account for just 59.5% of the labour market – compared with 73% in Germany and 71% in the UK – Ikea’s job creation plans are good news.

When the Swedish home goods giant asked for applications for 400 direct job openings at a new store in the Valencia region almost two years ago, the number of replies crashed the company’s servers.

So the Ikea shopping concept is popular both with customers and employees in Spain.

In a report published by Forbes in 2012, Ikea grabbed second place in a list of the 10 best retail companies to work for.

 

A STRATEGY FOR SUCCESS

By 2025, Ikea aims to double its number of stores and pick-up points  from the current 16.

In Spain it is competing with other international firms like French home-improvement giant Leroy Merlin, which has 60 sale outlets in the country.

So how does the Swedish firm win and keep its client base?
• Its price point is strategic – not expensive but not too cheap. Shoppers feel they get better value than at deeper discount stores.
• The products have a clean and simple aesthetic, taking the stress out of furniture buying and are popular with young people.
• Ikea’s stores are stand-alone and a unique destination for shoppers.

The company now has around 300 stores in 26 countries.

 

CONSUMPTION DRIVE LURES FOREIGN INVESTORS

Ikea has already invested €700 million in the Spanish market over the past five years and opened seven new facilities.

And it’s not the only top international company which has decided to expand its investments in Spain over the last 18 months, in response to the rise in consumption.

Between April and June, Spain registered a rise in the consumption of consumer goods of 3 percent annually, outpacing countries like Germany and Ireland, and compared with the eurozone average of 1.4%.

Several international players, like Japanese electronics and IT giant Fujitsu, Swiss-based Nestle and German discount supermarket chain Lidl, have announced expansion plans.

For information on investment and legal services in Spain, please contact corporate law firm Argali Abogados.

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