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IKEA growth hampered by planning restrictions

Ikea's chief executive today said he was looking to open three superstores in London but was struggling to obtain planning consent.

Meanwhile, in what will be bad news for the few remaining Habitat furniture stores, he pledged to continue cutting prices even as commodities costs soared.

Mikael Ohlsson said he wanted to build his stores in the capital in run-down industrial areas.

However, Ohlsson said he was finding it extremely difficult to obtain the right traffic planning solutions. Ikea already has four stores here. He told the Wall Street Journal: "In the UK, they want retail to get into the city. But that's not good for furniture retail. Especially in bulk. We prefer to be farther away from the city centre.

But the permits are taking a lot of time. Rules are rules."

Speaking days after Habitat's administrators announced the closure of all but three London stores which are being sold to Home Retail Group, Ohlsson said he was not concerned about higher commodity prices and will cut prices this year and next.

"What decides how much a lamp should cost? Only imagination sets the limits," he said.

Source : London Evening Standard
www.thisislondon.co.uk/standard-business/article-23966793-ikea-growth-hampered-by-planning-restrictions.do

04 July 2011
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