IKEA stakes on its restaurant business to sell furniture


Ikea, the world’s largest furniture retailer, expects its restaurant business to drive higher footfalls at its stores in India, a sharp contrast to other markets where customers flock in to buy its popular ready-to-assemble products.


Globally, food accounts for 5% to 10% of Ikea’s sales and this could be significantly higher in India, said a top official.


“We believe that we might have more customers eating than buying furniture, but the average ticket size of food is very small compared to furniture. So most likely, food will be the first contact point for people coming to the Ikea store,” said Patrick Antoni, deputy country manager at Ikea India, which will have a 1,000-seater restaurant in the middle of its upcoming 400,000 square foot store in the southern city of Hyderabad. That would be Ikea’s biggest restaurant globally.


In India, most retailers depend on restaurants, bars, cafes and food courts to attract footfalls, especially in malls. The country’s food service market is estimated to be worth over Rs 3 lakh crore.


Ikea globally sold food worth $1.8 billion out of its total revenue of $36.5 billion in 2016.


In India, half its restaurant menu will consist of vegetarian options, including idli and sambar, samosa and vegetable biryani sourced from about 25 vendors, mainly women-led social enterprises. Chicken will replace Ikea’s trademark beef and pork meatballs.


We internally call our restaurant or food business the best sofa-seller as it takes time to buy furniture, so we need food for people to stay. In India, for every customer on the cash counter, we will have one paying at the restaurant, too. That’s nearly 50% of the customers as Indians love food,” Antoni told ET on the sidelines of ReTechCon, organised by the Retailers Association of India and Nasscom.

Ikea plans to open 25 stores each the size of about four football fields in India by 2025. At the same time, the company will tweak and localise its model for India.

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