'Big dreams, slim wallets': Ikea's first NZ store coming to Auckland, meatballs and all

Thursday, 10 January 2019

Ikea is coming to Auckland, followed by the South Island - and it's bringing its famous meatballs, and up to 400 jobs.

Kiwis have waited for years for Ikea's arrival, and more than 19,000 people have liked the Facebook page 'bring Ikea to New Zealand'.

Ikea's New Zealand manager, Will Edwards, confirmed on Friday morning the new Ikea store will open in Auckland, and he also promised to complement the store with a second store for the regions.

'Kiwis have been asking for a long time. The blue and yellow building is iconic.'

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While he wouldn't give an exact time frame for the megastore launch, Edwards said it would take a number of years to set up. In the meantime, Ikea would open a popup shop in central Auckland. 

'It does take time to build a truly big blue and yellow iconic Ikea store, it will take a number of years to get the full offer up and running but we don't want to keep people waiting,' he said.

'It makes sense to be in Auckland where many people are living and also commuting in and out of. We'd like to give a piece of Ikea before the full meal comes along,' Edwards said.  

But a megastore is 'the very least the New Zealand people can get after waiting all this time'. 

Friday's announcement was made at Auckland waterfront venue The Cloud, by its global chief executive Jesper Brodin, to about 100 people, including media, retail experts and the Swedish Association. The Ambassador of Sweden, Par Ahlberger, told the audience he was also an ambassador for Ikea.

​Brodin said Ikea needed about 300 to 400 employees at the megastore and then several hundred more jobs as to support logistics. New Zealand will get the 'whole shebang', with a product range of about 7000 items at least in the big warehouse store.

'As for the price point, our ambition is always to be affordable for people and competitive with other retailers in New Zealand.'

Brodin said Ikea was for people with 'big dreams, big needs and thin wallets.

'We're big on function and quality.'

Edwards said there would be 50 mock room concepts in the big store, but details on the popup store are yet to be revealed.

Once the Auckland store opened, the 'next step will be in [the] South Island and then work our way up', Edwards said.

There were many sites of interest, but it was too early to say any more than that. Ikea was looking at potential locations with both Government agencies and the private sector.

The company would bring everything it could to Auckland as soon as it could, and it had the infrastructure to do it all at once, he said.

Edwards said Ikea would not be looking to source materials locally, except for food. The Ikea meatballs will be part of the deal.

The company would pay taxes according to New Zealand rules, Brodin said.

'When it comes to paying tax we are a long-term company, so New Zealand just like any market can count on us. 

'If you study Ikea, you see we are a company paying over 30 per cent tax in the total group.'

Edwards said the company had been in talks with the Government, including about tax.

There was room in the New Zealand market for Ikea, Edwards said.

'Not many international brands have established in New Zealand, that why the homewares section is shallow.

'We believe competition is healthy. We will fill a gap in the market and complement what is already here.'

Since confirmation of its arrival last month, the retailer has created a lot of buzz, with people speculating sizes and locations.

On Thursday afternoon, a day before its launch announcement, staff were seen setting up Ikea's iconic mock bedroom and bathroom displays.

Ikea came very close to opening its first Kiwi store in 2008 but lost a four year pursuit after the Environment Court ruled its then proposed location in Auckland, Mount Wellington, would cause traffic chaos.

Hamilton then put its hand up in late 2009 to host an Ikea outlet. Its economic development agency invited Ikea scouts to visit the city, but the response was reported to be lukewarm from the Australian franchise owner.

The 76 year old company was founded by Ingvar Feodor Kamprad and the name was derived from his name and birthplace - Ingvar Kamprad Elmtaryd Agunnaryd.

Kamprad died last January aged 91.

According to Bloomberg, who maintain a billionaires index, he was estimated to be worth US$58.7 billion (NZ$87.29b) upon his death.

In New Zealand, Ikea is likely to be put into the same space as the Warehouse, Nood, Freedom Furniture, Briscoes, Kmart, Bunnings, and Mitre 10, although Harford said Ikea was more of a young person's brand and more mature furniture buyers would possibly go elsewhere.

Auckland Chamber of Commerce chief executive Michael Barnett said Ikea's arrival was good news for the country, with it bringing a new range of products, pricing and competition to the market.

'It's a good thing for New Zealand. Yes it'll put pressure on the smaller retailers, but when Bunnings and Mitre 10 started out they put pressure on existing players, it's the new way - to have a megastore and sell products at a cheaper price,' Barnett said.

'It's good news for the DIY guy, for students, and it will create more jobs in construction and retail.'

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