Ikea will open its first Irish customer distribution centre at Greenogue Logistics Park in Rathcoole in southwest Dublin in early 2024 – cutting furniture delivery lead times by more than half – following the acquisition of the site by the Swedish retailer’s main franchisee.
About 120 jobs will be created across warehousing, logistics and administration once the centre is operational, Ikea said.
Ingka Investments, the investment arm of Ikea’s largest franchisee, the Ingka Group, has bought two of the park’s three warehouses – including Building Two, the 26,674 sq m space let to Ikea and its distribution contractor Wincanton – from global investment firm KKR and real estate private equity specialists Palm Capital.
The acquisition, which The Irish Times understands carries a value of over €100 million, is part of its worldwide strategy to invest in distribution and logistics real estate in the major cities in which it operates.
The furniture and homewares retailer – which has its main Irish physical store in Ballymun in north Dublin – said the local customer distribution centre would “enable quicker fulfilment of Ikea products for customers in Ireland” and also serve to reduce its transport-related carbon emissions.
The retailer’s fitout of the building, which it said was “one of the most environmentally sustainable and energy efficient logistics facilities” in Ireland, will begin next week, according to Marsha Smith, Ikea country deputy retail manager for the UK and Ireland.
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“We will start to receive stock into here towards the end of the year and then deliveries directly from here into customers’ homes will start early next year,” she said.
To date Ikea products have been delivered to consumers in the Republic via distribution centres in the UK or Belgium. The new centre, however, will see Ikea Ireland move from having a delivery time of at least six days, one of the longest in Europe, to one of the shortest, at three days for truck deliveries and two days for parcels.
“That was the main objective, really. It was to provide us with a solution that meant we could be more efficient, we could be faster with deliveries, and we could hold a lot more stock in Ireland,” Ms Smith said.
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The centre, which will hold 8,000 different Ikea products, will have the capacity to deliver 3 million items every year. Ikea forecasts that more than 300,000 orders will be delivered in its first year of operation, with this almost doubling within five years.
Ikea only began selling online in 2018. In the year to the end of August 2022, its Irish online sales were double what they were in its 2019 financial year. Total sales in its most recent full financial year climbed 14 per cent to €216.7 million, with sales of Lodrät pint glasses and picture frames higher in its Dublin store than in any other Ikea store in the world.
It said on Thursday that it remained committed to and was investing in the future of its physical store.
“We’ve been incredibly fortunate because we are seeing fantastic increases in both channels. We have the amazing store of Ballymun, that we are continuing to invest in. We are actually investing millions of euros this year and next year to make sure we keep that store to an amazing level,” Ms Smith said.
It has recently revamped the cookshop department at the Ballymun store, with makeovers planned later this year for the bedroom and children’s departments.
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Ms Smith said she “would be very happy” to open a second full physical store in the Republic, but did not reveal any plans to do so.
“It is honestly a dream for me, I would love to do that. This [customer distribution centre] is a huge part of the cornerstone for what is needed, I think, in having an efficient and sustainable logistics flow across the country,” she said.
“We’re always looking, we’re always doing research, looking at where do we think another store will be successful, so watch this space.”
The retailer now has three plan and order points, one in Naas, Co Kildare, one in St Stephen’s Green shopping centre in Dublin and one in Drogheda, Co Louth. These will be followed by a plan and order point in Douglas in Cork, and another in Portlaoise, Co Laois. The retailer also has an order and collection point in Carrickmines, Dublin.
The fitout of the Cork plan and order point is under way and it will open this spring, Ms Smith said. “We know that today we have many, many shoppers that place online orders from Cork and now this is our first step into the Cork market where we can provide kitchen and bedroom planning.”
Ingka Group owns 392 Ikea stores, out of a total of 460 worldwide. Its investment division has only recently started to acquire real estate in prime locations.
“Following earlier acquisitions in Paris and London Oxford Circus, which are to become innovative city centre Ikea stores, we are now proud to announce our first investment in logistics parks in Ireland,” said Frederik de Jong, Ingka Investments deputy managing director, as the deal was confirmed.
