×
Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

IKEA Plans $2.5Bln Expansion Across Russia

Swedish retailer IKEA plans to break out of a period of consolidation and invest 2 billion euros ($2.5 billion) through 2020 on expanding its network of shopping malls across Russia's regions, business daily Vedomosti reported last week.

IKEA Shopping Centers Russia already operates 14 vast shopping centers under the "MEGA" brand, located on the outskirts of Russia's biggest cities.

By 2018, the company plans to build a new 215,000 square meter mall in Mytishchi, northeast Moscow region. More centers will be constructed in St. Petersburg, Voronezh, Perm and Krasnoyarsk, Armin Mikaeli, the head of IKEA Shopping Centers Russia, said in a statement.

In recent years, the Swedish retailer refrained from opening new stores and instead focused on developing the existing ones. In 2011, the company said it was freezing investment in Russia because of excessive and unpredictable bureaucracy in some of Russia's regions. The "tolerance to corruption" displayed by some of its own staff also contributed to the decision to stall expansion efforts, the company said at the time.

Mikaeli said IKEA had decided to review its policies because the situation has improved on both fronts.

According to IKEA, more than 270 million people shopped at MEGA centers in Russia last year and the sales of the tenants increased by 6 percent.

The chain also appears to be resilient — which may come in useful as Russia enters a period of low growth.  While consumer preferences may change across other retailers, customers have always been loyal to MEGA, the head of Infoline analytical company Mikhail Burmistrov told Vedomosti.

"As other retailers were loosing their customers, MEGA traditionally saw increased attendance," Burmistrov said.


… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more