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IKEA plans to expand store network by nearly 50% by 2020

Furniture retailer IKEA has announced ambitious targets for 2020 of increasing revenue from £22.4bn ($36.0bn) in 2012 to between £36.6bn ($58.8bn) and £40.7bn ($65.4bn). It expects visitor numbers to double to 1.5 billion, with store numbers rising from 338 to 500 globally.

In addition, the business has started investing £1.2bn ($1.9bn) in a sustainability plan that runs from 2009 to 2015, which it hopes will result in 70% of the group’s energy coming from wind and solar; by 2020, it expects to use 100% renewable energy.

The long-term goals set by IKEA will put the business in a particularly strong position if they are achieved; however, there are likely to be many variable economic factors that cannot be accounted for, which puts the plan in doubt. It will be heavily reliant on growth in emerging economies, such as China, in which the retailer is currently investing heavily. However, if the global economy fails to recover or recovers at a slower rate than expected, the plans may become unachievable.

Sustainability plans are essential for any business looking to secure its long-term prospects, and will protect, to an extent, against unexpected movements in energy prices. It may also save IKEA money in the long term, as the investments made now will reduce the impact of rising energy costs.

Source : Verdict

01 November 2012
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