Ikea Australia boss says WA offers growth opportunities as it opens the State’s second location

Ikea will open its second Perth outlet on Wednesday but Australian boss Mirja Viinanen is already eyeing further expansion in WA, saying the State offered growth opportunities for the furniture retailer. The 544sqm store in Cannington marks Ikea’s 13th location in Australia and the first of its smaller “plan and order point” format in WA. It is a stripped-down version of Ikea’s more familiar mega stores, including one in Innaloo in Perth’s north. Speaking to The West Australian ahead of its opening, Ms Viinanen teased the company was already searching for future sites in Perth, but was tight-lipped about any locations and timelines. “We are very keen to understand even better and better what we can actually do in Perth . . . and how we can grow the business,” she said. “We have the store on the north side of the Swan River, now we are testing this plan and order point in the south part but of course, there’s much more opportunities.” Ms Viinanen says WA offers a big potential to grow the business, particularly in the regions. “When I think outside of the Perth area . . . and think about the remote selling opportunities and online opportunities, we still have quite a lot (to tap into),” she said. The Cannington store — which Ms Viinanen described as a “customer meeting point” — will allow customers to meet one-on-one with Ikea specialists to plan and create personalised home interiors. It will also offer a click-and-collect service. Up to 100 products will be available for immediate purchase, including storage boxes and drawer inserts, kitchen organisation items, cooking utensils and food storage containers. The Cannington store is the third of the new concept stores in Australia. There is already one in Melbourne’s west and Sydney’s Northern Beaches. Ikea Cannington manager Simba Mashanyare said the new opening signalled the retailer’s ambitions to build on its strong presence in Perth. “We know accessing our store has been a barrier for those customers who live or work south of the Swan River and a more convenient location means they can more easily visit us to take advantage of Ikea home furnishing expertise and inspiration to create a better life at home,” he said. “We are not only offering personalised one-on-one planning, but the ability to pick up orders right from Ikea Cannington as well as purchase key products to take home on the spot. “These are things our customers have told us they want at an Ikea plan and order point.” Ikea Australia has returned losses or modest profits for most of its 45-plus years in Australia despite booming sales, but Ms Viinanen says there are no concerns around profitability. Ikea Australia recorded a gross profit of just over $700 million in the 12 months to August last year, but advertising, franchise and rental costs — together with other unexplained expenses — pushed it to a pre-tax loss of $69m. A tax credit then reduced it to a bottom line loss of $48.5m. Ms Viinanen reiterated the loss was attributable to an early settlement of long-term loans with the Ikea parent company, Ingka Holdings. “We had a good financial year last year, we got a very good opportunity to pay back (the loans),” she said. “When it comes to overall profitability, we have been profitable the last few years.” Ikea Australia’s income tax payments have also come under scrutiny in recent years, but Ms Viinanen said: “We are always paying the taxes as required.” Ms Viinanen echoed comments made by JB Hi-Fi chief executive Terry Smart on Monday, saying she is encouraged by the more positive news in the economy, with cooling inflation and talks of interest rate cuts later this year. “We do believe that the second half of the calendar year 2024 will already be much better from the consumer point of view and cost-of-living,” she said. “We started to invest quite hard last year when it comes to prices . . . we will invest this year even harder and we’re not talking about having short periods of discounts. “We are truly investing in the prices by lowering more and more than normal prices.”