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IKEA

Ikea to revamp stores as online business grows

The company that controls most Ikea branches is repurposing its stores to adapt to soaring online business.

Published: 9 May 2022 14:44 CEST
Ikea to revamp stores as online business grows
Photo: Lise Åserud/NTB/TT/Scanpix

Ingka Group said on Monday it was investing three billion euros ($3.2 billion) by the end of 2023 to open new shops and modernise existing ones.

“The investment will allow us to renovate and repurpose already existing stores”, Tolga Öncü, retail operations manager at Ingka Group, which manages over 400 of Ikea’s 500 or so stores worldwide, told AFP.

As more and more businesses focus on online shopping, the company noted in a statement that “our stores remain one of our biggest strengths”.
But Öncü also stressed that physical stores were being revamped to support online purchases.

He cited the example of a branch in Kuopio, Finland, which has been upgraded to support shipping online orders.

The expenditure of three billion euros by the end of next year marks a step up for Ingka, which invested 2.1 billion euros in its new and existing shops between 2019 and 2021.

Major investments of almost 1.2 billion euros are planned in London, and Ingka will also continue investing in markets which are considered mature, such as Spain and Germany.

Founded and headquartered in Sweden, Ikea is owned by a complex structure of companies and foundations based mainly in the Netherlands, Switzerland and Liechtenstein.

Traditionally, massive Ikea stores have been placed in suburbs or on the outskirts of towns, but the furniture giant started a change in strategy by opening its first city centre shop in Hamburg in 2014, and a new model with a smaller offering in Paris in 2019.

It is also planning to open new stores in or near city centres, notably in Nice this week and in Stockholm this summer.

The pioneer of flat-pack furniture to be assembled at home was founded by Ingvar Kamprad in 1943, and has grown into a multinational giant present in some thirty countries.

At the beginning of March, Ikea announced the suspension of its major activities in Russia and Belarus following Russia’s invasion of Ukraine.

The move affected nearly 15,000 employees, 17 stores and three production sites as well as 47 suppliers in Russia and 10 in Belarus. “Our business will remain paused until further notice,” Öncü told AFP.

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NORTHVOLT

Northvolt warns work permit salary threshold could jeopardise Sweden’s green transition

Sweden’s minimum salary threshold for work permits has increased by almost 120 percent in less than a year, and there are plans to increase it again to the median salary next summer. Battery manufacturers Northvolt warns that this could stop the company from hiring and retaining key workers.

Published: 3 July 2024 12:32 CEST
Northvolt warns work permit salary threshold could jeopardise Sweden's green transition

“Northvolt’s extensive labour requirements in northern Sweden cannot currently be met by permanently established workers in Sweden or within the EU,” the company wrote in a response to the government’s proposal to raise the salary threshold to the median salary, currently 35,600 kronor.

“This applies in particular to machine operators and technicians, whose minimum wages under collective bargaining agreements are lower than the median wage, and therefore are particularly vulnerable in this context.”

The EU has highlighted qualified machine operators and technicians as professions which are particularly hard to source within the bloc, meaning companies often have no choice but to source these workers from non-EU countries.

Northvolt has the added complication of being located in northern Sweden, an area which in general often struggles to find key workers in a number of industries, and the company isn’t convinced that enough is being done to fix this.

“Northvolt does not believe that the government and the Public Employment Service’s measures to promote geographic mobility in the Swedish labour market is going to be able to cover the company’s need for labour,” it wrote, while adding that it believes the proposed hike to the work permit salary threshold could have “significant consequences” for its facility in Skellefteå.

“Aside from the direct effects on the company, Northvolt sees a risk that staffing in healthcare, services and infrastructure in northern Sweden could be negatively affected by the salary threshold, which would indirectly affect Northvolt’s expansion.”

In addition to this, the company deems the proposed exemptions to the salary threshold – these would be put forward by the Migration Agency and the Public Employment Service based on professions where there’s a labour shortage – to be insufficient and unpredictable.

Northvolt’s criticism highlighted the fact that the exemptions are based on a model which is currently under development and which may not be ready by the time the law is due to come into force, as well as the fact that professions with a labour shortage will be defined using a so-called SSYK code.

Some key roles for Northvolt to do with battery production do not have one of these codes, as they are relatively new roles.

“It remains to be seen how the proposed model would effectively be able to identify professions with a labour shortage when they don’t have an SSYK code,” the company wrote, adding that this all makes it harder for the company to plan, for example, will an employee who is granted a work permit once be eligible for renewal two years later?

“The employee in that situation would risk being deported from Sweden. If that were to happen, it would be deeply unfair for the employee who has contributed to supporting Swedish society in a role where there is a shortage, and a catastrophe for the employer who has invested years of education and talent in the employee.”

“This lack of predictability can be compared to earlier notorious so-called kompetensutvisningar (talent deportations), and will further complicate the recruitment or necessary talent,” it wrote.

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