IKEA

IKEA International Group

Type	Private
Genre	Retail (Specialty)
Founded	Älmhult, Småland, Sweden (1943)
Founder(s)	Ingvar Kamprad
Headquarters	Delft, Netherlands
Area served	Worldwide
Key people	Mikael Ohlsson (President) Hans Gydell (President Inter IKEA Group)
Products	Self-assembly furniture
Revenue	€22.71 billion (2009)[1]
Employees	127,800 (2008)[2]
Website	IKEA.com

IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) is a privately held, international home products Dutch corporation that designs and sells ready-to-assemble furniture, appliances and home accessories. The company, which pioneered flat-pack design furniture at affordable prices , is now the world's largest furniture retailer.^[3]

IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden, named as an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd, in Småland, South Sweden).^[4]

The groups of companies that form IKEA are all controlled by INGKA Holding B.V., a Dutch corporation, which in turn is controlled by a tax-exempt, not-for-profit Dutch foundation.^[5] The intellectual property of IKEA is controlled by a series of obscure corporations that can be traced to Netherlands Antilles. The unusual ownership structure is arguably an instrument for tax evasion.^[6]

INGKA Holding B.V. owns the industrial group Swedwood, which sources the manufacturing of IKEA furniture (outsourcing), the sales companies that run IKEA stores, as well as purchasing and supply functions, and IKEA of Sweden, which is responsible for the design and development of products in the IKEA range. INGKA Holding B.V. is wholly owned by Stichting INGKA Foundation, which is a non-profit foundation registered in Leiden, Netherlands. The logistics center Europe is located in Dortmund, Germany.

Inter IKEA Systems B.V. in Delft, also in the Netherlands, owns the IKEA concept and trademark, and there is a franchising agreement with every IKEA store in the world. The IKEA Group is the biggest franchisee of Inter IKEA Systems B.V. Inter IKEA Systems B.V. is not owned by INGKA Holding B.V., but by Inter IKEA Holding S.A. registered in Luxembourg, which in turn is part of Inter IKEA Holding registered in the Netherlands Antilles. The ownership of the holding companies has not been disclosed.^[6]

Contents 1 General overview 2 IKEA stores 2.1 Store format 2.2 Restaurants and food markets 2.3 Småland 3 Products 3.1 Furniture 3.2 Houses, flats 3.3 Family Mobile 3.4 Manufacturing 3.5 Product names 4 Catalog 5 IKEA Family 6 Corporate structure 6.1 Non-taxable profit 6.2 Control by Kamprad 6.3 Charitable giving 7 IKEA Social Initiative 8 Environmental performance 9 Community impact 10 Criticisms 10.1 Typeface change 10.2 Labor practices 11 Advertising 12 Awards 13 See also 14 References 15 External links

General overview

The company which was originated in Småland, Sweden, distributes its products through its retail outlets. As of May 2010, the chain has 313 stores in 37 countries, most of them in Europe, North America, Asia and Australia. The IKEA Group itself owns 276 stores in 25 countries and the other 37 stores are owned and run by franchisees outside the IKEA Group in 16 countries/territories.^[7] 2006 saw the opening of 16 new stores. A total of at least 15 openings or relocations are planned for 2010.^[8]

In some languages, "IKEA" is pronounced something like [iˈke.a], but in English it is /aɪˈkiː.ə/, similar to the word "idea." As such, IKEA brought action in the Supreme Court of British Columbia successfully preventing a competitor in Victoria from using the name "Idea." Its Chinese name is "宜家" (yíjiā), which literally means "fit for home" in written Chinese and sounds like the phrase "right now" in Cantonese pronunciation.

The IKEA Website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 470 million visitors to the IKEA websites in the year from Sep. 2007-Sep. 2008.^[9]

IKEA is keen to show leadership in adopting more environmentally friendly measures in its manufacturing processes . In 1990, IKEA adopted The Natural Step framework as the basis for its environmental plan (see "Environmental performance", below).^[10]

IKEA stores

The first IKEA store was opened in Sweden in 1958. The first stores outside Sweden were opened in Norway (1963) and Denmark (1969). The 1970s saw the spread of stores to other parts of Europe, with the first store outside Scandinavia opening in Switzerland (1973), followed by Germany (1974). During the same decade, stores were opened in other parts of the world, including Japan (1974), Australia and Hong Kong (1975), Canada (1976), and Singapore (1978). Ikea has expanded further in the 1980s, opening stores in such locations as France (1981), the Canary Islands (1981), Belgium (1984), the United States of America (1985), the United Kingdom (1987), and Italy (1989). IKEA has continued expansion into more countries in the 1990s and 2000s. Germany, with 44 stores, is IKEA's biggest market, followed by the United States, with 37. At the end of 2009 financial year IKEA group had 267 stores in 25 countries.^[11] The first IKEA store in Latin America opened in February 17, 2010 in Santo Domingo, Dominican Republic.^[12][13] However, the company has thus far not shown much of a presence in the developing countries.

Store format

Older IKEA stores are usually very large blue buildings with few windows and yellow accents (the company's colors are also the national colors of Sweden). They are often designed around a "one-way" layout which leads customers along "the long natural way.". This layout is designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a consumer to go right to the section where the goods and services needed are displayed) although there are often shortcuts to other parts of the showroom. The sequence first involves going through furniture showrooms making note of selected items.

Then the customer collects a shopping cart and proceeds to an open-shelf warehouse for smaller items (Market Hall). Then the customer visits the furniture warehouse (Self Serve) where they collect previously noted showroom products in flat pack form. Sometimes they are directed to collect products from an external warehouse on the same site or at a site nearby. Finally they take their products to the cashier's station to make payment.

Newer IKEA stores, like the one in Mönchengladbach, Germany, make more use of glass, both for aesthetic and functional reasons. Skylights are also now common in the Self-serve warehouses. More natural light reduces energy costs, improves worker morale and gives a better impression of the product.

Whilst the original design involved the warehouse on the lower level and the showroom and marketplace on the upper, today most stores globally have the Showroom upstairs with the marketplace and warehouse downstairs. Additionally, some stores are single level. Some stores maintain separate warehouses to allow more stock to be kept on-site at any given time, although this occasionally results in challenges in finding the items, as well as a perception of having to queue in line twice. Single-level stores are found predominantly in areas where the cost of land would be less than the cost of building a 2-level store – examples include the store in Saarlouis, Germany and Haparanda, Sweden. Some stores also have dual level warehouses and machine controlled silos which allow large quantities of stock to be accessed throughout the selling day.

Most IKEA stores offer an "as-is" area at the end of the warehouse just prior to the cashiers. Returned, damaged and formerly showcased products which are not in new condition or taken out of the IKEA product range are displayed here, and sold with a significant discount, but also with a "no-returns" policy. Most IKEA stores communicate the IKEA policy on environmental issues in the "as-is." In the United Kingdom, this is referred to as "Bargain Corner."

In Hong Kong, where shop space is limited and costly, IKEA has opened three outlets across the city, which are actually part of shopping malls. They are tiny compared to common "large blue box" store design, but are huge by Hong Kong standard. Most of the outlets still have a "one-way" layout. An exception is the newest outlet in Telford Plaza, where the three independent floors can be accessed freely from each. However, following IKEA tradition, the cashiers are only located on the lowest floor.

The vast majority of IKEA stores are located outside of city centres, primarily because of land cost and traffic access. Several smaller store formats have been unsuccessfully tested in the past (the "midi" concept in the early 90s, which was tested in Ottawa and Heerlen with 9,300 m², or a "boutique" shop in Manhattan). A new format for a full-size, city centre store was introduced with the opening of the Coventry (UK) store in December 2007. This is in response to UK government restrictions blocking retail establishment outside city centres, and the format is expected to be used for future IKEA stores in the UK. The Coventry store has 7 levels and therefore has a flow different from other IKEA stores.

Another feature of many stores are their long opening hours. Many IKEA stores are in operation 24 hours a day with restocking and maintenance being carried out throughout the night. However, public opening hours tend to be much longer than most other retailers, with stores open well into the evening in many countries. In the UK for example, almost all stores are open past 8pm with opening times often around 9-10am. IKEA Croydon has one of the longest opening hours worldwide being open from 10am to 11pm Monday to Friday.

Restaurants and food markets

Many stores include restaurants serving traditional Swedish food such as potatoes with Swedish meatballs, cream sauce and lingonberry jam, although there are variations. In Kuala Lumpur, Malaysia the usual boiled potatoes have been switched to french fries. Besides these Swedish staples, hot dogs and drinks are also sold, the latter for around 5 SEK (approx €0.50), along with a few varieties of the local cuisine, and beverages such as lingonberry juice. Also items such as Prinsesstårta — Princess cake are sold as desserts. IKEA stores in Saudi Arabia serve chicken shawarma at the exit instead of the traditional IKEA hot dog.

In many locations the IKEA restaurants open daily before the rest of the store and serve an inexpensive breakfast. In Canada, this breakfast costs $1 and includes eggs, sausage, and home fries. In the United States, the local variation serves scrambled eggs, bacon, country potatoes and choice of Swedish pancakes or french toast sticks. In the Netherlands it costs €1 and consists of a croissant, a small bread roll, butter or margarine, jam, a slice of cheese, a boiled egg, and coffee or tea. In Australia it costs AU$2.95 - AU$3.50^[14][15][16] and consists of hash brown, bacon, scrambled eggs, a sausage and tomato, with a $2 vegetarian option with baked beans which omits the sausage and bacon.

IKEA Canada, for a limited time, serves dim sum alongside its original breakfast menu.

Refills of coffee, tea, and soft drinks are free of charge, even in countries where this is uncommon in other restaurants.

Many stores also have a mini-shop selling Swedish-made, Swedish-style groceries, such as Swedish meatballs, packages of gravy and various Scandinavian cookies and crackers, as well as salmon and salmon roe. IKEA also sells lingonberry jam in a wide array of sizes, including buckets.

Småland

Many stores have a play area, named Småland (Swedish for small lands, and also the name of the province of Sweden where Ingvar Kamprad was born). Parents drop off their children at a gate to the playground, and pick them up after they arrive at another entrance. Parents are also given free pagers by the on-site staff; the staff will set off these pagers should a child need his or her parents sooner than expected.

Products

Furniture

Much of IKEA's furniture is designed to be assembled by the consumer rather than being sold pre-assembled. IKEA claims this permits them to reduce costs and use of packaging by not shipping air; the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled. This is also a practical point for many of the chain's European customers, where public transport is commonly used; the flat-pack distribution methods allow for easier transport via public transport from the store to a home assembly.

IKEA contends that it has been a pioneering force in sustainable approaches to mass consumer culture. Kamprad refers to the concept as "democratic design," meaning that the company applies an integrated approach to manufacturing and design (see also environmental design). In response to the explosion of human population and material expectations in the 20th and 21st century, the company implements economies of scale, capturing material streams and creating manufacturing processes that hold costs and resource use down, such as the extensive use of particle board. The intended result is flexible, adaptable home furnishings, scalable both to smaller homes and dwellings as well as large houses.

Not all furniture is stocked at the store level. For example, while a particular color of sofa model may be stocked and can be picked up at the store, another color of the same model that is not available in the store will instead have to be shipped from a warehouse to the customer's home for an additional delivery charge. Unlike with other retail stores, any requests for a model to be shipped from the warehouse to the store for pickup would also incur the same delivery charge to the customer. Delivery charges can easily add another 10% to 25% to the purchase price.

Houses, flats

IKEA has also expanded their product base to include flat-pack houses, in an effort to cut prices involved in a first-time buyer's home. The product, named BoKlok was launched in Sweden in 1996 in a joint venture with Skanska. Now working in the Nordic countries and in UK, sites confirmed in England include London, Manchester, Leeds, Gateshead and Liverpool.^[17]

Family Mobile

On 8 August 2008, IKEA UK launched Family Mobile – a virtual mobile phone network, which uses the T-mobile network.

Manufacturing

Although IKEA household products and furniture are designed in Sweden, they are largely manufactured in developing countries to keep down costs. With suppliers in 50 countries, roughly 2/3 of purchasing is from Europe with about 1/3 from Asia. A small amount of products are produced in North America. Comparatively little production actually takes place in Sweden, though it still remains the fourth-largest supplier country (behind China, Poland and Italy). China accounts for about 2.5 times as much supply as Sweden. For most of its products, the final assembly is performed by the end-user (consumer).

Product names

IKEA products are identified by single word names. Most of the names are Swedish in origin. Although there are some notable exceptions, most product names are based on a special naming system developed by IKEA.^[18]

• Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs: Swedish placenames (for example: Klippan)
• Beds, wardrobes, hall furniture: Norwegian place names
• Dining tables and chairs: Finnish place names
• Bookcase ranges: Occupations
• Bathroom articles: Scandinavian lakes, rivers and bays
• Kitchens: grammatical terms, sometimes also other names
• Chairs, desks: men's names
• Materials, curtains: women's names
• Garden furniture: Swedish islands
• Carpets: Danish place names
• Lighting: terms from music, chemistry, meteorology, measures, weights, seasons, months, days, boats, nautical terms
• Bedlinen, bed covers, pillows/cushions: flowers, plants, precious stones
• Children's items: mammals, birds, adjectives
• Curtain accessories: mathematical and geometrical terms
• Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits or berries, functional descriptions
• Boxes, wall decoration, pictures and frames, clocks: colloquial expressions, also Swedish place names

For example, DUKTIG (meaning: good, well-behaved) is a line of children's toys, OSLO is a name of a bed, BILLY (a Swedish masculine name) is a popular shelf, DINERA (meaning: (to) dine) for tableware, KASSETT (meaning: cassette) for media storage. One range of office furniture is named EFFEKTIV (meaning: efficient, effective), SKÄRPT (meaning: sharp or clever) is a line of kitchen knives.

A notable exception is the IVAR shelving system, which dates back to the early 1970s. This item is named after the item's designer.

Because IKEA is a worldwide company working in several countries with several different languages, sometimes the Nordic naming leads to problems where the word means something completely different to the product. While exotic-sounding names draw attention, e.g., in anglophone countries, a number of them call for a snicker. Notable examples include "Jerker" desk, "Fukta" plant spray and "Fartfull" workbench.^[19] Also, the most recent new product, Lyckhem (meaning bliss). The products are generally withdrawn, probably after someone pointed at blunders, but not before generating some news. Similar blunders happen with other companies as well.^[20]

Company founder Ingvar Kamprad, who is dyslexic, found that naming the furniture with proper names and words, rather than a product code, made the names easier to remember.^[21]

Catalog

IKEA publishes an annual catalogue. First published in Swedish in 1951,^[22] the catalogue is now published in 55 editions, in 27 languages for 36 countries,^[23] and is considered to be the main marketing tool of the retail giant, consuming 70% of the company's annual marketing budget.^[24]

The catalogue is distributed both in stores and by mail.^[25] Most of the catalogue is produced by IKEA Communications AB in IKEA's hometown of Älmhult, Sweden where IKEA operates the largest photo studio in northern Europe at 8,000 square metres in size.^[26] The catalogue itself is printed on chlorine-free paper of 10–15% post-consumer waste. More copies of the IKEA catalogue are printed each year than the Bible.^[27]

According to Canadian broadcaster, CTV, "IKEA's publications have developed an almost cult-like following online. Readers have found all kinds of strange tidbits, including mysterious cat pictures, apparent Mickey Mouse references and weird books wedged into the many shelves that clutter the catalogues."

IKEA Family

In common with some other retailers, IKEA has launched a loyalty card in its stores in Sweden, Denmark, Finland, the UK, Australia, Netherlands, Belgium, Germany, Austria, Russia, China, Japan, Switzerland, Czech Republic, Slovakia, Ireland, Poland, Italy, Hungary, France, Dominican Republic, Portugal and Spain called "IKEA Family." The distinctive orange card is free of charge and can be used to obtain discounts on a special range of products found in each IKEA store. In particular, it gives 25% off the price of commissioned ranges of IKEA products on presentation of the card. The card also gives discounts on food purchased in the restaurant and the Swedish Food Market. In the Netherlands, Denmark, Belgium, Germany, Austria, Russia, Japan, UK, Switzerland, Slovakia, Czech Republic, Italy and Poland it also entitles the holder to free coffee in the restaurant. In Spain, Hungary, Ireland and Poland, this offer is only available on working days.

In conjunction with the card, IKEA also publishes and sells a printed quarterly magazine titled IKEA Family Live which supplements the card and catalogue. The magazine is already printed in thirteen languages and an English edition for the United Kingdom was launched in February 2007. It is expected to have a subscription of over 500,000.^[28]

Corporate structure

Despite its Swedish roots, IKEA is owned and operated by a complicated array of not-for-profit and for-profit corporations.

The IKEA corporate structure is divided into two main parts: operations and franchising. Most of IKEA's operations, including the management of the majority of its stores, the design and manufacture of its furniture, and purchasing and supply functions are overseen by INGKA Holding, a private, for-profit Dutch company. Of the IKEA stores in 36 countries, 235 are run by the INGKA Holding. The remaining 30 stores are run by franchisees outside of the INGKA Holding.^[29]

INGKA Holding is not an independent company, but is wholly owned by the Stichting Ingka Foundation, which Kamprad established in 1982 in the Netherlands as a tax-exempt, not-for-profit foundation. The Ingka Foundation is controlled by a five-member executive committee that is chaired by Kamprad and includes his wife and attorney.^[30]

While most IKEA stores operate under the direct purview of Ingka Holding and the Ingka Foundation, the IKEA trademark and concept is owned by an entirely separate Dutch company, Inter IKEA Systems. Every IKEA store, including those run by Ingka Holding, pays a franchise fee of 3% of the revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems is exceedingly complicated and, ultimately, uncertain. Inter IKEA Systems is owned by Inter IKEA Holding, a company registered in Luxembourg. Inter IKEA Holding, in turn, belongs to an identically named company in the Netherlands Antilles that is run by a trust company based in Curaçao. The owners of this trust company are unknown (IKEA refuses to identify them) but are assumed to be members of the Kamprad family.^[30]

In Australia, IKEA is operated by two companies. Stores located on the East Coast including Queensland, New South Wales, and Victoria are owned by INGKA Holding. Stores elsewhere in the country including South Australia and Western Australia are owned by Cebas Pty Ltd.^[31] Like elsewhere, all stores are operated under a franchise agreement with Inter IKEA Systems.

Non-taxable profit

In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation's nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.

Inter IKEA Systems collected €631 million of franchise fees in 2004, but reported pre-tax profits of only €225 million in 2004. One of the major pre-tax expenses that Inter IKEA systems reported was €590 million of “other operating charges.” IKEA has refused to explain these charges, but Inter IKEA Systems appears to make large payments to I.I. Holding, another Luxembourg-registered group that, according to The Economist, “is almost certain to be controlled by the Kamprad family.” I.I. Holding made a profit of €328 million in 2004.

In 2004, the Inter IKEA group of companies and I.I. Holding reported combined profits of €553m and paid €19m in taxes, or approximately 3.5 percent.^[30]

The Berne Declaration, a non-profit organization in Switzerland that promotes corporate responsibility, has formally criticized IKEA for its tax avoidance strategies. In 2007, the Berne Declaration nominated IKEA for one of its Public Eye “awards,” which highlight corporate irresponsibility and are announced during the World Economic Forum in Davos, Switzerland.^[32]

Control by Kamprad

Along with helping IKEA make non-taxable profit, IKEA's complicated corporate structure allows Kamprad to maintain tight control over the operations of Ingka Holding, and thus the operation of most IKEA stores. The Ingka Foundation’s five-person executive committee is chaired by Kamprad. It appoints the board of Ingka Holding, approves any changes to Ingka Holding’s bylaws, and has the right to preempt new share issues. If a member of the executive committee quits or dies, the other four members appoint his or her replacement.

In Kamprad's absence the foundation's bylaws include specific provisions requiring it to continue operating the Ingka Holding group and specifying that shares can be sold only to another foundation with the same objectives as the Ingka Foundation.^[30]

Charitable giving

The INGKA Foundation is officially dedicated to promoting “innovations in architecture and interior design.”^[30] With an estimated net worth of $36 billion, the foundation is unofficially the world’s largest charitable organization, beating out the much better known Bill and Melinda Gates Foundation, which has a net worth of approximately $33 billion.^[33]

Despite its enormous wealth, the Ingka Foundation does very little charitable giving. Detailed information about its grantmaking is unavailable, as foundations in the Netherlands are not required to publish their records. But IKEA has reported that in 2004–2005, the Ingka Foundation's donations were concentrated on the Lund Institute of Technology in Sweden, and the Lund Institute reported the receipt of $1.7 million grants from the foundation during both of those years. By way of comparison, the Gates Foundation made gifts of more than $1.5 billion in 2005.^[33]

Notwithstanding the Ingka Foundation's lack of concerted philanthropic activity, IKEA is involved in several international charitable causes, particularly in partnership with UNICEF. These include:

• In the wake of the 2004 Boxing Day Tsunami, IKEA Australia agreed to match dollar for dollar co-workers donations and donated all sales of the IKEA Blue Bag to the cause.
• After the Pakistan earthquake of 2006, IKEA gave 500,000 blankets to the relief effort in the region^[34]
• IKEA has provided furniture for over 100 "bridge schools" in Liberia.^[35]
• In the 2008 Sichuan earthquake in China, IKEA Beijing sold an alligator toy for 40 yuan (US$5.83, €3.70) with all income going to the children in the earthquake struck area

IKEA also supports American Forests to restore forests and reduce pollution.^[36][37]

Links with Education In 2008 IKEA was a supporter of the Design Wales Ffres Awards, providing a creative brief for undergraduate design competition.

IKEA Social Initiative

In September 2005 IKEA Social Initiative was formed to manage the company’s social involvements on a global level. IKEA Social Initiative is headed by Marianne Barner.

The main partners to IKEA Social Initiative are UNICEF^[38] and Save the Children.^[39]

On the 23rd of February 2009 at the ECOSOC event in New York, UNICEF announced that IKEA Social Initiative has become the agency’s largest corporate partner, with total commitments of more than 180 million USD.^[40][41]

Examples of involvements:

• IKEA through IKEA Social Initiative contribute €1 to UNICEF and Save the Children from each soft toy sold during the holiday seasons, raising a total of €16.7 million so far.^[42]
• IKEA Social Initiative provided soft toys to children in cyclone affected Myanmar.^[43]
• Starting in June 2009, for every Sunnan solar-powered lamp sold in IKEA stores worldwide, IKEA Social Initiative will donate one Sunnan with the help of UNICEF.^[44]

Environmental performance

After initial environmental issues like the highly publicized formaldehyde scandals in the early 1980s and 1992, IKEA took a proactive stance on environmental issues and tried to prevent future incidents through a variety of measures.^[45] In 1990, IKEA invited Karl-Henrik Robèrt, founder of The Natural Step, to address its board of directors. Robert's system conditions for sustainability provided a strategic approach to improving the company's environmental performance. This led to the development of an Environmental Action Plan, which was adopted in 1992. The plan focused on structural change, allowing IKEA to "maximize the impact of resources invested and reduce the energy necessary to address isolated issues."^[10] The environmental measures taken, include the following:

1. Replacing polyvinylchloride (PVC) in wallpapers, home textiles, shower curtains, lampshades, and furniture—PVC has been eliminated from packaging and is being phased out in electric cables;
2. minimizing the use of formaldehyde in its products, including textiles;
3. eliminating acid-curing lacquers;
4. producing a model of chair (OGLA) made from 100% post-consumer plastic waste;
5. introducing a series of air-inflatable furniture products into the product line. Such products reduce the use of raw materials for framing and stuffing and reduce transportation weight and volume to about 15% of that of conventional furniture;
6. reducing the use of chromium for metal surface treatment;
7. limiting the use of substances such as cadmium, lead, PCB, PCP, and AZO pigments;
8. using wood from responsibly-managed forests that replant and maintain biological diversity;
9. using only recyclable materials for flat packaging and "pure" (non-mixed) materials for packaging to assist in recycling.^[10]
10. introducing rental bicycles with trailers for customers in Denmark.^[46]

More recently, IKEA has stopped providing plastic bags to customers, but offers reusable bags for sale. The IKEA restaurants also only offer reusable plates, knives, forks, spoons, etc. Toilets in some IKEA restrooms have been outfitted with dual-function flushers. IKEA has recycling bins for compact fluorescent lamps (CFLs), energy saving bulbs, and batteries. In 2001 IKEA was one of the first companies to operate its own cross-border freight trains through several countries in Europe.^[47]

In August 2008, IKEA also announced that it had created IKEA GreenTech, a €50 million venture capital fund. Located in Lund (a college town in Sweden), it will invest in 8–10 companies in the coming five years with focus on solar panels, alternative light sources, product materials, energy efficiency, and water saving and purification. The aim is to commercialise green technologies for sale in IKEA stores within 3–4 years.^[48][49]

Community impact

IKEA's goals of sustainability and environmental design in their merchandise have sometimes been at odds with the impact a new IKEA store can have on a community.

• In September 2004, when IKEA offered a limited number of free $150 vouchers at the opening of a new store in Jeddah, Saudi Arabia, three people were crushed to death in a stampede that followed the store's opening.^[50]

• IKEA has demolished historic buildings^[51] in at least one case for a parking area.^[52] (At the College Park, Maryland, USA, store there is an interactive digital display which tells the history of a tavern which used to exist where the store is currently located.)
• IKEA was refused planning permission for a future store in the United Kingdom in 2004 (to be based in Stockport, Greater Manchester) by the Office of the Deputy Prime Minister. It applied for judicial review but lost in 2005.^[53][54] However, they later received permission to build a store within Greater Manchester a few miles from the originally planned site in Ashton-Under-Lyne.^[55] An estimated £10,000 was spent on traffic policing, and even more on rerouting traffic from the M60 motorway around Ashton.
• After viewing the 100-foot tall sign of an IKEA under construction near Portland International Airport, Randy Leonard, the city commissioner in charge of sign permits in Portland, Oregon, placed a moratorium on all pending and future sign permits in the area.^[56]

Criticisms

Some criticisms of IKEA:

• Quality & Service. Quality: Shoppers, who are not familiar with the IKEA selling points, complain about product quality, some of which has been addressed with recalls and/or product relaunches and makeovers (some still argue that it is better to buy a high quality, long lasting but expensive furniture piece than an inexpensive but poorly made IKEA piece; this argument is strongest when higher end IKEA furniture item prices vary little less than from other furniture retailers in local markets). If anything is to be made of the IKEA brand it is that all its furniture pieces are designed "in-house" and produced by IKEA factories, selected by IKEA itself—nothing is made from outside patented products or designs; this approach in turn lowers product costs passed on to the consumer. Service: Customers often voice complaints on service, particularly when it comes to the Marketplace and Self-Serve warehouse services (shoppers do not expect self service furniture pick up and assembly when it comes to furniture stores—particularly in the U.S., Canada, Japan, etc. where the IKEA brand is a more recent concept than in Europe) as well as returns policies, which vary from country to country. Shipping is also a common point of contention. In some countries, notably the U.S. shipping is done by an outside company that charges either a flat fee, or places mileage restrictions—another issue other furniture retailers may or may not have to deal with, depending on their practices. Of items available online, shipping from warehouses is often more expensive than from a physical IKEA store.
• Store locations. Many shoppers have voiced complaints that IKEA stores are sparsely located, mainly near urban centers, but out of the way for many shoppers, and in many countries there is not much of a presence in more rural/provincial areas. Some of this can be attributed to the fact that IKEA buys the land where it opens new stores, and builds all new stores from the ground up, thereby eliminating leasing/rent fees. This approach is financially savvy in the long run, but it hampers the company's ability to open stores up quickly enough. This is a problem when dealing with a retailer who is not only a furniture purveyor, but also depends on much of its business for smaller Marketplace items, much like with a traditional retailer such as Target(Target Corporation), Walmart, etc., retailers whose presence is ubiquitous in almost any town.
• Not all products are available online. Some items are only available in stores.
• IKEA, much like Walmart has faced accusations of possibly displacing small businesses or "mom & pop" stores, due to its low prices and wide product selection. An example of municipalities that embraced this view included Las Vegas, which denied IKEA from building a store within the city, and why to this day Las Vegas—a major metro area in the U.S.--is without an IKEA store, and why many Las Vegas shoppers travel to Southern California IKEA stores in the Los Angeles area to shop—the closest stores to Las Vegas.
• In the 1990s, there were several complaints arising from IKEA's English television advertising campaigns:
  • “Stop being so English:” In which a “Swedish psychologist” claims the English are uptight due to their taste in “English” furniture (complaints were dismissed).^[57]
  • An advertisement where a management consultant suggests how much more furniture a company could buy if it fired an office worker (complaints were dismissed but IKEA voluntarily withdrew the advert).^[58]
  • A campaign under the slogan, "Just pack up, ship out, find a place of your own. And for all your new things, you know where to come. Make a fresh start," got complaints that it was trivializing marriage breakups (complaints were dismissed).^[59]
• IKEA founder Ingvar Kamprad was, as a teen, directly involved in the pro-Nazi New Swedish Movement (Nysvenska Rörelsen) until at least 1948, causing tensions when IKEA began opening stores in Israel.^[60] Kamprad devotes two chapters to his time in Nysvenska Rörelsen in his book, Leading By Design: The IKEA Story and, in a 1994 letter to IKEA employees, called his affiliation with the organization the "greatest mistake of his life."^[61]
• Former Norwegian prime minister Kjell Magne Bondevik has criticized IKEA for not depicting women assembling furniture in its instruction booklets, despite the fact that many sets of instructions do, in fact, show women.^[62]
• In 2004 there was controversy about an Irish law restricting the maximum size of a retail outlet to 6,000 m². IKEA's plan to build a much larger store in Dublin caused the law to be put up for debate. The law was changed to remove the size limit for retail outlets selling durable goods in designated areas.^[63] The Minister for the Environment was criticized for allegedly changing the law to suit one company and other agencies protested the law change as damaging to small businesses while the government defended their decision stating that the move was a positive one for Irish consumers. IKEA Dublin has since opened on 27 July 2009.^[64]
• June 2007: the designated nationalist Social Democratic and Labour Party complained about an artist's rendering of IKEA Belfast that included both the Union Flag and the Ulster Banner flag as two of the three flags in front of the store. After being labelled "an upmarket Orange hall" by the party, IKEA assured customers and coworkers that only the Swedish flag would be seen outside the actual store.^[65]
• June 2007: some prospective customers took offense at an email newsletter^[66] with questionable advertising copy. To wit, the BRUNKRISSLA bedding notes said, "Brightens up your grad's dorm. Unlike a creepy gothic roommate, who can be a bad influence." Members of the goth subculture took offense at the stereotype.^[67]
• A researcher from the University of Copenhagen discovered that for years, IKEA has named their cheap rugs after Danish places, while the more expensive and luxurious furniture was named after Swedish places. The researcher, Klaus Kjøller, who is well-known for tongue-in-cheek statements, accused IKEA of imperialism.^[68]
• People in Canada became upset with IKEA when Citytv discovered that IKEA charged as much as twice the price in their Canadian stores for the same items sold in their American stores, this despite the Canadian dollar reaching parity with the U.S. dollar.^[69]
• In 2008, IKEA sent an email to their British customers advising that "IKEA Shop Online is open everywhere", however this only applied to England and Wales. As of February 2010, Northern Irish and Scottish customers are unable to shop online, however some Scottish customers may get items delivered via IKEA Edinburgh.^[70] This scheme called IKEA DIRECT only applies to certain postcodes and costs between £35 (City of Edinurgh) to £120 (Aberdeenshire) for delivery ^[71]

Typeface change

IKEA caused a minor flap in the graphic design world in 2009 when it changed the typeface used in its catalog from Ikea Sans to Verdana, expressing a desire to unify its branding between print and web media. The controversy has been attributed to the perception of Verdana as a symbol of homogeneity in popular typography.^[72]

Time magazine and the Associated Press ran articles on the controversy including a brief interview with an IKEA representative, focusing on the opinions of typographers and designers.^[73] Design and advertising industry-focused publications such as Business Week joined the fray of online posts. The branding critic blog, Brand New, was one of those using the Verdanagate name.^[72] The Australian online daily news site Crikey also published an article on the controversy.^[74] The Guardian ran an article asking "Ikea is changing its font to Verdana – causing outrage among typomaniacs. Should the rest of us care? Absolutely."^[75]The New York Times said the change to Verdana "is so offensive to many because it seems like a slap at the principles of design by a company that has been hailed for its adherence to them."^[76]

Labor practices

In November 2009, Ikea, along with Abercrombie & Fitch, Gymboree, Hanes, Kohl’s, LL Bean, Pier 1, Propper International, and Walmart, was added to the 2010 Sweatshop Hall of Shame by the labor rights group International Labor Rights Forum.^[77]

Advertising

IKEA ran a commercial widely thought to be the first commercial featuring a homosexual couple. It aired only once, in 1994.^[78] IKEA has run other commercials targeting the gay community as well as a commercial featuring a transgender woman.^[79]

In 2002, the inaugural television component of the "Unböring" campaign, titled Lamp, went on to win several awards, including a Grand Clio,^[80] Golds at the London International Awards^[81] and the ANDY Awards,^[82] and the Grand Prix at the Cannes Lions International Advertising Festival,^[83] the most prestigious awards ceremony in the advertising community.

IKEA launched a UK wide advertising campaign in September 2007 titled 'Home is the Most Important Place in the World' using estate agent signs with the term 'Not For Sale' written on them as part of the wider campaign. However, after the campaign appeared in the Metro newspaper London the business news website www.mad.co.uk remarked that the IKEA campaign had amazing similarities with the marketing activity of UK home refurbishment company Onis Living who had launched their own Not For Sale advertising campaign^[84] 2 years previously and in November 2006 had been awarded the Interbuild 2006 Construction Marketing Award for best campaign under £25,000.^[85]

A debate ensued between Fraser Patterson, Chief Executive of Onis and Andrew McGuinness, partner at Beattie McGuinness Bungay (BMB), the advertising and PR agency awarded the £12m IKEA account.^[86][87] The essence of the debate was that BMB claimed to be unaware of Onis's campaign as Onis were not an advertising agency. Onis's argument was that they had already been accredited for their Not For Sale campaign and that their advertising could be seen in prominent landmarks throughout London, they were concerned about the impact IKEA's campaign would have on the originality of their own.

After some negotiations BMB and IKEA agreed to provide Onis with a feature page on the IKEA campaign site linking through to Onis's .co.uk site, for a period of 1 year. Onis is possibly the only company to have ever been advertised by IKEA in such a fashion. In 2008 Onis Homes limited was placed into voluntary liquidation and the website www.onishome.com closed.

The Intellectual Property and trading rights of Onis Homes Limited were later purchased by new shareholders with the strategy to grow the Onis brand throughout the U.K as a one stop shop home refurbishment franchise using the trading name Onis living.

IKEA recently paired up with the makers of popular video game The Sims 2 to make a stuff pack called The Sims 2 IKEA Home Stuff. The game features many items that can be found in IKEA stores and was released on June 24, 2008 in North America and June 26, 2008 in Europe. It is the second stuff pack with a major brand, the first being The Sims 2 H&M Fashion Stuff, which are both coincidentally companies of Swedish origin.

IKEA has taken over title sponsorship of Philadelphia's annual Thanksgiving Day parade in 2008, replacing Boscov's, who filed for bankruptcy in August 2008.

In November 2008 a subway train decorated in IKEA style was introduced in Novosibirsk, Russia. Four cars were turned into a mobile showroom of the Swedish design. The redesigned train, which features colourful seats and fancy curtains, carried passengers until June 6, 2009.

Oyster cards (the ticket-free system for London Underground) are now given with wallets sponsored by IKEA who also sponsor the tube map.

In January 2009, just before the new store opened in Southampton, the MV Red Osprey of Red Funnel was re-painted in an entirely yellow and blue livery to celebrate the opening of the new IKEA store in Southampton. This is the first time a Red Funnel ferry has been re-painted out of its own red and white colour scheme. It is expected to stay in these colours for 12 months as part of a deal between Red Funnel and IKEA to provide home delivery services to the Isle of Wight.

In March 2010, IKEA has developed an interesting event in four important metro stations in Paris. Furniture collections have been displayed in high-traffic spots, giving the potential customers a chance to interact with the brand by checking out the products. The subway walls have been also filled with prints that showcase IKEA interiors

Awards

IKEA was named one of the 100 Best Companies for Working Mothers in 2004 and 2005 by Working Mothers magazine. It ranked 96 in Fortune's 100 Best Companies to Work For in 2006 and in October 2008, IKEA Canada LP was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine.^[88]

See also

• IKEA Catalogue
• Ready-to-assemble furniture

References

External links

• Company home page
• The Kitchen
• Full list of stores, store sizes and opening dates
• IKEA to cut 300 managerial jobs
• Ikea opens overnight stay stores
• Ikea destroyed ten ancient tombs during new store construction in China (Chinese)
• "The miracle of Älmhult" by Oliver Burkeman from the Guardian newspaper. The writer talks about his visit to IKEA's HQ in Älmhult
• "IKEA: Flat-pack accounting". Economist. 2006-05-11. http://economist.com/business/displaystory.cfm?story_id=6919139. 

Business data

• IKEA International A/S at Google Finance
• IKEA International A/S at Yahoo! Finance
• IKEA International A/S at Hoover's

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