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IKEA in the ACT? It’s not all good news

By 19 August 2014 50

flat-pack-stock

Whip out your Allen keys; IKEA is coming to the Capital.

Whilst a vast majority of Canberrans are rejoicing at the prospect of purchasing trendy and affordable furniture without having to take a day trip to Sydney and lug it all back down the Federal Highway, others are considering the downfalls of the Swedish flatpack furniture giant appearing in the ACT.

Once IKEA arrives and opens for business, you can expect it to pretty well demolish independent furniture stores. Sales will probably start to dwindle pretty quickly and staff will need to be laid off to meet costs and some of these businesses will have to close their doors indefinitely. Even the larger chain stores like Fantastic Furniture may see a drop in sales given that IKEA is delivering a similar product at similar prices, paired with the novelty of it being a fresh new brand.

One business that we are likely see close down almost immediately is Bring it Home, a small business owned by two best friends – Michael and Loyzek. These guys travel to Sydney, pick up IKEA orders for customers and transport it all back to Canberra, delivering people’s goods right to their front door. I really feel for these two – they have a pretty unique business model and through no fault of their own, it will eventually come crashing down on top of them. Perhaps there may still be business opportunity for them in Canberra? I have a small car that wouldn’t fit much furniture in it – even when it’s flatpacked – could there possibly be a niche market for Canberra and surrounds delivery? If Michael and Loyzek can compete with whatever price Ikea charges for home delivery, I think they would probably retain a good customer base.

Are there any pros in IKEA coming to Canberra? Yes. A few.

Besides the awesome furniture and funky home décor that IKEA specialises in, with new business – and big business at that – comes a stack of new jobs. Hopefully down the track the poor souls that inevitably lose their jobs in small furniture stores will be able to pick up employment with IKEA. The last thing the Territory needs right now is more job losses.

You can also expect a boost in visitors from cities like Goulburn and Wagga Wagga now that they have no need to drive to Sydney for all their Swedish furniture needs. IKEA opening at the Majura Park shopping centre will hopefully bring a big breath of fresh air to that precinct and boost sales in the many stores that always seem to be lacking customers. Perhaps it’s just my luck but whenever I head out to Majura Park – fairly regularly, at least 2 or 3 times a week – it’s always a ghost town. It’s the best place to do your shopping if you, like me, hate people and like to shop in peace.

When the furniture superstore opens up in about 12 months time, will you be there pushing and shoving to get through the door first? Or will you, like other Canberrans, be throwing your Allen keys into the lake and boycotting the Swedish supererstore in favour of some locally-owned, independent furniture stores?

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50 Responses to IKEA in the ACT? It’s not all good news
#1
dungfungus10:21 am, 19 Aug 14

I would like to know what incentives and concessions the government have given them to open in Canberra as IKEA appear to have by-passed the normal criteria they would require to expand into a regional area.
Thank you for acknowledging that the jobs “created” will be to the detriment of employees of existing retailing businesses. There will be more empty shops in Fyshwick, no doubt.
Governments never seem to understand this.

#2
watto2311:36 am, 19 Aug 14

dungfungus said :

I would like to know what incentives and concessions the government have given them to open in Canberra as IKEA appear to have by-passed the normal criteria they would require to expand into a regional area.
Thank you for acknowledging that the jobs “created” will be to the detriment of employees of existing retailing businesses. There will be more empty shops in Fyshwick, no doubt.
Governments never seem to understand this.

Do you ever support anything?
If a business can’t compete on quality or price why should it still exist to rort customers? Some of those independant furniture shops have provided me woeful business, woeful pricing and woeful service over the years. Now Ikea is coming and i’m somehow meant to support the independant businesses, because there is competition. Businesses need to adpat and change to environments all the time.

Some furniture businesses might suffer, but maybe the existing businesses at Majura park will benefit and need to hire more people. Maybe businesses will adapt to a different retail model and actually improve their sales and hire more staff. You have no facts, evidence or proof that opening an Ikea will close any business down. I’m sure one probably will, but i doubt it will be as many staff as Ikea hires.

The government has made no concessions at all, except for providing the land to build on. In fact i think the government wanted them to build somewhere near a town centre but none of the land was suitable. The land they are building on has low value and appeal so it makes good sense and good use of that land.

Also Ikea knows exactly how much business they get from Canberra unless people lie about their postcodes. Build a store in Canberra and they will gain all that business and more from people who can’t be bothered travelling, plus business from people who would travel but Sydney is too far, so only go occasionally when in Sydney. Plus its going to be a smaller store with less stock on shelves.

#3
Holden Caulfield11:45 am, 19 Aug 14

MEAT BALLS!

#4
justsomeaussie11:49 am, 19 Aug 14

This kind of logic says we should never allow anyone to build anything because it’s always taking away someone’s job. It’s called capitalism, not protectionism. If the existing businesses want to compete they will obviously need to step up their game. Ikea and furniture sales isn’t some Woolies /Coles type mono/duopoly.

As an anecdote my wife and I were looking for bedside tables about a year ago, every single furniture place in Canberra we found had the same dark stained wood with the created imperfection marks and gouges all from a south east Asian country, every single one.

So it’s hardly surprising that people in Canberra are crying out for someplace that isn’t just a reseller.

#5
niftydog12:11 pm, 19 Aug 14

The population size criteria that Ikea supposedly adhere too is just urban legend, surely? Why would they restrict their business model like that? Nothing has been bypassed here, it’s a clear move towards expanding into new markets. The Canberra store is said to be a blueprint for future smaller stores as it is the first single-level design.

Bring it Home would have seen the writing on the wall a few years ago. In any case, Ikea delivery services are usually handled by contractors and Michael and Loyzek are reportedly in negotiations to secure the local contract.

Plenty of people don’t like Ikea, are not in a position to assemble their own or desire something of better quality. Local furniture stores will just have to adapt to the new market forces.

#6
Paul007512:35 pm, 19 Aug 14

I can’t afford to shop at the other furniture stores, especially since Ozcro closed down a few months ago. IKEA is better quality than the cheap c#$p that’s offered by Fantastic and some of the other discount furniture places for less money. So I for one can’t wait for IKEA to open here.

It is sad the Bring It Home guys will no long have a working business model, however they stated recently in an interview they knew it’d eventually happen. Perhaps they could offer to deliver around Canberra, and do the assembly and installation for people instead.

IKEA opening is not all doom and gloom, they cater for a very specific market, and many of the stores in Canberra that sell furniture aren’t going for that kind of dollar.

#7
KTB12:48 pm, 19 Aug 14

Disclosing firstly that I am a fan of Ikea, and will be shopping at their new store, I must ask if you have sought affordable furniture options in those locally-owned, independent furniture stores. We have. There are none to be found.
Even Bring it Home charge an incredible amount for their services. Some friends and I did a quick calculation recently of how much we could undercut their prices and still make a profit.
Small business is not an automatic licence to squeeze blood out of an already dry stone of a market.

#8
thefionahamer12:50 pm, 19 Aug 14

Maybe the Bring it Home guys can take stuff to Wagga, Yass and Goulburn from Canberra, rather than to Canberra from Sydney.

#9
Casiola1:21 pm, 19 Aug 14

“Even the larger chain stores like Fantastic Furniture may see a drop in sales given that IKEA is delivering a similar product at similar prices, paired with the novelty of it being a fresh new brand.”

Excellent!

I cannot wait for Ikea. FF is rubbish with even worse customer service.

#10
pink little birdie1:41 pm, 19 Aug 14

Personally I find Ikea furniture expensive and about the same quality as fantastic Furniture. I usually find better quality for the same price elsewhere. I do like some of their homewares though and the food.

Ikea is suitable for a good income first time out of home type situation… and Canberra gets a brand new lot each year.

#11
Maya1231:43 pm, 19 Aug 14

I have never seen an IKEA store and will be checking it out with interest. From the photographs I have seen I have gained the impression it is modern, but a little flimsy looking and bland. But I will make a final judgement when I see it. I hope it isn’t all white.

#12
arescarti421:55 pm, 19 Aug 14

As others have said, we live in a market economy and this is how it works. Business models go out of date and firms fail all the time. It’s called progress.

The bottom line is Ikea is the world’s biggest retailer of flat-packed particle board c$#p because it’s really good at it.

#13
dungfungus2:37 pm, 19 Aug 14

arescarti42 said :

As others have said, we live in a market economy and this is how it works. Business models go out of date and firms fail all the time. It’s called progress.

The bottom line is Ikea is the world’s biggest retailer of flat-packed particle board c$#p because it’s really good at it.

Best comment ever on this issue. Seriously.
Joe Hockey could use you as a media adviser right now.

#14
VYBerlinaV8_is_back2:39 pm, 19 Aug 14

watto23 said :

If a business can’t compete on quality or price why should it still exist to rort customers?

I agree.

Interesting that there’s so much noise about support local grocers, though.

#15
bigfeet3:21 pm, 19 Aug 14

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing. Buy good quality and you will get twenty years. But very good quality and it will last a lifetime. It is hardly a high turn-over item.

Seriously, what are you people doing to (or on) your furniture that you need to regularly replace it?

#16
hopeful3:34 pm, 19 Aug 14

I’ve used the “Ikea Taxi” in Europe – they charged a flat fee and it was great – these guys should still offer the service locally and regionally as a lot of the IKEA stuff is just too big and heavy to handle in a car. How about offering an IKEA contruction service as well – saves fighting with allen keys and screwdrives especially if you are on your own.

#17
arescarti423:37 pm, 19 Aug 14

dungfungus said :

arescarti42 said :

As others have said, we live in a market economy and this is how it works. Business models go out of date and firms fail all the time. It’s called progress.

The bottom line is Ikea is the world’s biggest retailer of flat-packed particle board c$#p because it’s really good at it.

Best comment ever on this issue. Seriously.
Joe Hockey could use you as a media adviser right now.

My advice to Joe Hockey is don’t talk to the media.

#18
eyeLikeCarrots3:58 pm, 19 Aug 14

Holden Caulfield said :

MEAT BALLS!

Horsemeat Balls!!!!

#19
Mysteryman4:05 pm, 19 Aug 14

I’m looking forward to IKEA opening here for the following reasons:

1. I can afford most IKEA products.

2. I can’t afford most of the products sold by “local” retailers.

IKEA aren’t going to put the more expensive furniture retailers out of business. They cater to a different market. What they will do is provide an alternative to the pitiful range currently available for those who are interested in less expensive furniture/goods. And hopefully they’ll do it with service that puts the locals to shame.

As for Bring it Home – it’s unfortunate for them, but that’s life in a capitalist world. I hope they can continue to be successful in other ways.

#20
A_Cog4:25 pm, 19 Aug 14

Mysteryman said :

I’m looking forward to IKEA opening here for the following reasons:

1. I can afford most IKEA products.

2. I can’t afford most of the products sold by “local” retailers.

I wanted a nice sofa, so looked around Canberra for what I had in mind. Nearest I could find was $2500, and it wasn’t very close to what I wanted.

IKEA had exactly what I wanted, for $429.

Yeah, I could have bought SIX sofas from IKEA for the same price as one Canberran sofa.

So I drove down to Sydney on a long weekend to buy the IKEA sofa I wanted, and at the register the lady ask me “what’s your postcode?”

“2602″ I said.

“Oh” she said. “You’re from Canberra. I wonder why we get so many of you down here on long weekends.”

#21
thatsnotme4:34 pm, 19 Aug 14

bigfeet said :

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing. Buy good quality and you will get twenty years. But very good quality and it will last a lifetime. It is hardly a high turn-over item.

Seriously, what are you people doing to (or on) your furniture that you need to regularly replace it?

Ikea sell a lot more than just furniture.

Mysteryman said :

I
As for Bring it Home – it’s unfortunate for them, but that’s life in a capitalist world. I hope they can continue to be successful in other ways.

I remember reading a story about them when news of Ikea first broke. As others mentioned, they always new the day would come. They also weren’t doing this full time – it was work on top of their regular jobs, and they weren’t crying over spilled milk. It seemed like they were satisfied that they’d been able to keep this service going for as long as they had.

#22
dungfungus4:40 pm, 19 Aug 14

Holden Caulfield said :

MEAT BALLS!

What, no bacon & egg rolls? How un-Australian is that?

#23
niftydog4:58 pm, 19 Aug 14

bigfeet said :

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing.

We bought part of a kitchen and half our bookshelves a few years ago, and the rest of it late last year – the kitchen all screwed together without fuss and it all matches the old stuff. If we changed our mind tomorrow and wanted to turn a cupboard into a set of drawers, change the whole kitchen to a different colour or turn a bookshelf into a glass-door display cabinet we could go back and buy the bits and do it.

You could, if you were completely bat-poo mental, spend two or three days at Ikea and furnish an entire house with just about everything you need; crockery, cutlery, glasses, mugs, utensils, beds, linen, towels, toys, tables, chairs, couches, light fixtures, rugs, bbqs, bookshelves etc etc plus an entire kitchen including appliances.

I’m no blubbering fan-boy either, having spent days conquering shopping lists (literally) 2 feet long (our last trip involved eleven fully loaded large flat-bed trolleys) and installing an entire kitchen I actually convulse and scream uncontrollably when I notice my wife browsing Ikea.com. But it’s all there in one spot, there’s loads of options, it works and it’s cheap.

#24
John Moulis5:23 pm, 19 Aug 14

thefionahamer said :

Maybe the Bring it Home guys can take stuff to Wagga, Yass and Goulburn from Canberra, rather than to Canberra from Sydney.

The Bring It Home guys should switch to assembling Ikea products. I can never follow those illustrations and phoning someone to come around and decipher those illustrations to produce what you see in the store display would surely be a winner.

#25
Maya1235:34 pm, 19 Aug 14

bigfeet said :

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing. Buy good quality and you will get twenty years. But very good quality and it will last a lifetime. It is hardly a high turn-over item.

Seriously, what are you people doing to (or on) your furniture that you need to regularly replace it?

Ha ha, great entry. Even cheap furniture if looked after will last a long time. My cheap lounge lasted over twenty years, and I only sold it when I wanted a larger, more stylish one. It wasn’t thrown out; it went to a new home as it still had years in it. Presuming that is the new owners treat it as well as I did.

If you want cheap, long lasting furniture it can often be found in second-hand shops. It might need a bit of initial work, but then it will last years; some of it a lifetime and beyond. I bought some second-hand furniture thirty years ago, repaired and did it up and it will outlive me and likely the next owner too. Solid wood, not chipboard.

#26
dungfungus5:56 pm, 19 Aug 14

Maya123 said :

bigfeet said :

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing. Buy good quality and you will get twenty years. But very good quality and it will last a lifetime. It is hardly a high turn-over item.

Seriously, what are you people doing to (or on) your furniture that you need to regularly replace it?

Ha ha, great entry. Even cheap furniture if looked after will last a long time. My cheap lounge lasted over twenty years, and I only sold it when I wanted a larger, more stylish one. It wasn’t thrown out; it went to a new home as it still had years in it. Presuming that is the new owners treat it as well as I did.

If you want cheap, long lasting furniture it can often be found in second-hand shops. It might need a bit of initial work, but then it will last years; some of it a lifetime and beyond. I bought some second-hand furniture thirty years ago, repaired and did it up and it will outlive me and likely the next owner too. Solid wood, not chipboard.

I still have some CATT furniture from WA which was custom made with Jarrah. It is 30 years old. I tried to lift one item last week and I couldn’t. Stuff like this is now becoming collectable (like Fler).
I don’t think IKEA stuff will ever be collectable.

#27
Maya1236:28 pm, 19 Aug 14

dungfungus said :

Maya123 said :

bigfeet said :

I have always failed to understand what the fuss is all about.

It’s furniture. Why do you need a regular supplier? You buy an item and then keep it for about a decade and replace it when it is failing. Buy good quality and you will get twenty years. But very good quality and it will last a lifetime. It is hardly a high turn-over item.

Seriously, what are you people doing to (or on) your furniture that you need to regularly replace it?

Ha ha, great entry. Even cheap furniture if looked after will last a long time. My cheap lounge lasted over twenty years, and I only sold it when I wanted a larger, more stylish one. It wasn’t thrown out; it went to a new home as it still had years in it. Presuming that is the new owners treat it as well as I did.

If you want cheap, long lasting furniture it can often be found in second-hand shops. It might need a bit of initial work, but then it will last years; some of it a lifetime and beyond. I bought some second-hand furniture thirty years ago, repaired and did it up and it will outlive me and likely the next owner too. Solid wood, not chipboard.

I still have some CATT furniture from WA which was custom made with Jarrah. It is 30 years old. I tried to lift one item last week and I couldn’t. Stuff like this is now becoming collectable (like Fler).
I don’t think IKEA stuff will ever be collectable.

I just googled CATT furniture. Very retro/funky. Probably a good investment.

#28
thatsnotme6:41 pm, 19 Aug 14

dungfungus said :

I still have some CATT furniture from WA which was custom made with Jarrah. It is 30 years old. I tried to lift one item last week and I couldn’t. Stuff like this is now becoming collectable (like Fler).
I don’t think IKEA stuff will ever be collectable.

Does anyone seriously ever think IKEA stuff will be collectable? Was your custom made furniture considered expensive 30 years ago when you bought it?

Comparing hand crafted solid hardwood furniture to flat pack stuff designed to appeal to people on a budget just makes no sense. If I go and buy a new Hyundai or Toyota, I’m not expecting it to turn into a classic 30 years down the track. If I’m buying a Ferrari or Austin Martin though, perhaps I can expect that.

#29
Lazy I7:46 pm, 19 Aug 14

thatsnotme said :

dungfungus said :

I still have some CATT furniture from WA which was custom made with Jarrah. It is 30 years old. I tried to lift one item last week and I couldn’t. Stuff like this is now becoming collectable (like Fler).
I don’t think IKEA stuff will ever be collectable.

Does anyone seriously ever think IKEA stuff will be collectable? Was your custom made furniture considered expensive 30 years ago when you bought it?

Yes.

Out of production IKEA furniture is already highly collectible.

Scandinavian design is timeless and regularly cycles popularity, the same can’t be said for the lumbering chunks of of timber with lathe turned legs the local Canberra market is used to.

I have purchased Australian (custom) made furniture and have plenty of IKEA too. I doubt I will have an issue moving any of the IKEA furniture in future.. the second hand market for well maintained IKEA furniture is huge.

I won’t be shedding a tear for the Canberra market that has been pumping out the same mediocrity for 20+ years.

There’s a reason people have been happy to make 6+ hour round trips to IKEA in Sydney.

#30
grunge_hippy9:08 pm, 19 Aug 14

Don’t forget the whole south coast market too. We were up at Ikea once and in the line were several people who make the trip from south of Ulladulla. The Bring it Home guys still have anything south/southwest/southeast of here.

bring it on. I can’t wait, but I think I’ll be waiting a few weeks ’till the excitement dies down, just like I did when costco came.

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