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Have we hit ‘peak stuff?’ Ikea says there’s röom to grow.

Have consumers hit their limit for buying furniture, as one Ikea executive recently claimed? Don’t bet on it. Ikea sure isn’t.


 
Customers wait in line to checkout at an Ikea store in the Brooklyn borough of New York, U.S., on Saturday, Sept. 19, 2015. The U.S. Census Bureau is scheduled to release monthly durable goods data on Sept. 24. (Michael Nagle/Bloomberg/Getty Images)

Customers wait in line to checkout at an Ikea store in the Brooklyn borough of New York, U.S., on Saturday, Sept. 19, 2015. The U.S. Census Bureau is scheduled to release monthly durable goods data on Sept. 24. (Michael Nagle/Bloomberg/Getty Images)

Steve Howard, the head of sustainability at Swedish furniture giant Ikea, raised eyebrows at a recent U.K. climate change talk when he mused that Western consumers had finally hit “peak stuff,” including “peak home furnishings.” It was a seemingly stunning admission, coming as it did from one of the world’s biggest retailers, and it conjured up images of a looming worldwide glut of slatted Malm bed frames and upholstered Tullsta armchairs. But if Ikea thinks its more affluent customers are already swimming in personal belongings—and remember this is a company that specializes in clever storage solutions, from Billy and Pax to Ivar and Algot—it has a funny way of showing it. Just 10 days later, Ikea Canada president Stefan Sjostrand joined the mayor of Halifax to announce a brand new 30,000 sq.-m store in Dartmouth, part of a plan to double the number of Ikea locations in Canada, from 12 to 24, over the next decade. (Globally, Ikea has also touted plans to double its sales by 2020, although it’s backed off the ambitious timetable in recent years amid a slowing worldwide economy.)

Nor is Ikea content with simply erecting more cavernous big-box stores in Ikea-less communities, many of which practically beg the popular retailer to set up shop. Ikea is also seeking to boost sales by taking a page from “fast-fashion” retailer H&M, another Swedish success story, and collaborating with big-name designers on limited-time collections.

So how to square Ikea’s “peak stuff” talk with its “buy more” actions? A spokesperson volunteered in an email that Howard’s comments were made as “part of a wider global context where many people still have very limited means” while Sjostrand suggested the goal was “to continue to grow our business, but grow it in a more sustainable way.” Translation: Ikea will sell you more furniture and home furnishings, but it will try harder not to make you feel guilty about it. Which explains why the company’s corporate reports are festooned with examples of sustainability initiatives, from selling only LED-compatible lighting to serving responsibly harvested fish in the cafeteria.

Yet, while Ikea should be lauded for trying to reduce its environmental footprint, its lofty goal of bringing sustainability to the masses will be far more difficult to achieve. For one thing, Ikea’s core business is selling well-designed home furnishings so cheap—a $39.99 Fjellse bed frame or $12.99 Lack side table—they’ve effectively become disposable. In fact, some of Ikea’s particle-board creations seem designed to dispose of themselves when they detect disassembly with an Allen key, like a crumbly spy plane that’s fallen into enemy hands. How can such waste, critics charge, ever be considered good for the planet?

Anything’s possible, of course, but so far at least, it sounds like a case of trying to have your meatballs and eat them, too.

A customer gathers items to purchase in the warehouse of an Ikea store in the Brooklyn borough of New York, U.S., on Wednesday, Sept. 26, 2012. The U.S. Census Bureau is scheduled to release durable goods data on Sept. 27. (Victor J. Blue/Bloomberg/Getty Images)

A customer gathers items to purchase in the warehouse of an Ikea store in the Brooklyn borough of New York, U.S., on Wednesday, Sept. 26, 2012. The U.S. Census Bureau is scheduled to release durable goods data on Sept. 27. (Victor J. Blue/Bloomberg/Getty Images)

Whether Canadians are actually at “peak stuff” is debatable. The surge in firms offering “self-storage” units across the country—essentially a second garage or attic—suggests we may be finally approaching some sort of inflection point, but that doesn’t seem to have stopped the hordes from descending on Ikea’s blue-and-yellow stores each weekend. And there’s little doubt Ikea has ridden the wave of Canada’s housing boom to the bank. Data from Statistics Canada shows sales of furniture ballooned nearly nine per cent in November 2015 (the most recent month for which figures are available), compared to a year earlier, with all those tiny, 650 sq.-foot condominium units erected in cities like Toronto, Vancouver and Calgary seemingly tailor-made for Ikea’s sleek, space-saving Scandinavian designs. At the same time, Ikea’s affordable kitchens—including modular cabinets, butcher block countertops and apron-front sinks—have become a staple of many a Canadian home renovation or property flip.

The outcome was a 10 per cent increase in Ikea Canada’s sales last year to $1.8 billion. Ikea also reported the number of visitors to its stores increased by four per cent to 26 million, or about one store visit per working age Canadian. Worldwide, parent Ikea Group enjoyed $48.7 billion in sales at its 328 global locations and $5.3 billion in profit .(Although Ikea is a privately held company, it releases selected financial data in a bid to be transparent about its operations.)

Ikea’s now infamous showroom “maze” no doubt played a role in those impressive same-store sales increases. Alan Penn, a professor of architectural computing at the University College London, has argued the one-way trip through the real-life version of Ikea’s catalogue is designed to leave shoppers disoriented and slightly overwhelmed, primed to toss home furnishing items in their carts lest they have to go back and find them again. In fact, some estimate between 40 per cent and 60 per cent of all Ikea purchases are impulse buys—things people didn’t plan to buy when they walked in the doors.

With more people shopping online, Ikea has been forced to explore new ways to boost shoppers’ spending. That includes reaching out to new customers—including those who may have assumed their Billy bookcase days ended when they graduated from university—and creating a sense of urgency around purchases. In October, Ikea launched a limited-time collection of furniture and housewares in collaboration with British designer Ilse Crawford that included cork-topped tables and stools; weighty ceramic pitchers and plates; a daybed wrapped in jute and a rug woven from seagrass. Ikea called it “high-end design . . . at typical Ikea prices,” while Crawford told Architectural Digest she sought to bring “atmosphere” to Ikea’s already extensive lineup of more than 9,500 pieces. Popular items sold out at some of Ikea’s Canadian stores within days.

Sjostrand says it was the first time Ikea has partnered with an outside designer for an entire collection. It won’t be the last. “We will continue to work with celebrities because we think it’s important to spice things up,” he says, pointing to an upcoming collaboration with London menswear designer Katie Eary that will hit stores this spring and is heavy on unblinking eyeballs and boldly coloured fish. Asked whether the goal is to make Ikea’s furniture more like fashion, so that customers are encouraged to replace pieces more frequently, Sjostrand said that’s only true of accessories like pillows, curtains, blankets and rugs, which are typically used to freshen up tired decor. When it comes to furniture, however, he says Ikea builds things to last.

Others beg to differ. Aiden Enns, a former managing editor at Adbusters magazine who founded the Buy Nothing Christmas movement, calls Ikea’s products “beautiful junk” and says, “You buy it even though you know it won’t last very long.” Now the editor of Winnipeg-based Geez magazine, Enns doesn’t doubt executives are keen to do the right thing, but he still believes Ikea’s business model is inherently unsustainable because consumers will eventually realize “how stupid it is to keep buying mid-grade disposable items.”

Like many big global corporations, the image that Ikea presents to the public reflects a somewhat sanitized version of reality. The company’s official history recounts how founder Ingvar Kamprad got his start selling pencils and postcards, and derived the Ikea moniker from his initials plus the first letters of the name of the farm he grew up on and the parish in which it was located (Elmtaryd and Agunnaryd). It also details the evolution of Ikea, founded in 1943, and its flat-packed furniture concept, as well as Kamprad’s desire to ensure the longevity of his creation by splitting Ikea’s retail operations and intellectual property into two separate entities, making a corporate takeover that much more difficult. Ikea also spends a lot of time talking about its grandiose-sounding mission “to create a better everyday life for the many people.”

What the official history doesn’t mention is how Kamprad, one of the world’s wealthiest people, fled his native Sweden for four decades to avoid paying the country’s high taxes—all while simultaneously building Ikea’s brand around Swedish imagery, names and designs. At the same time, critics have questioned whether Ikea’s extraordinarily complex ownership structure, involving a web of Netherlands- and Liechtenstein-registered companies and not-for-profits, was similarly designed as a tax dodge. Equally troubling were revelations that Ikea used political prisoners in East Germany in the 1970s and 1980s to make some of its furniture, a transgression it apologized for three years ago, after it was confirmed by an auditor’s report.

Peel back the cheerful marketing and eye-catching designs, in other words, and Ikea is not much different than other big, global retailers like Wal-Mart or Target. It’s a massive, profit-making entity that leans on its 978 suppliers in 50 countries to deliver inexpensive products of relatively high quality. “When it comes to this thing about Ikea selling cheap [products], I would say, ‘No, they’re selling inexpensively because they are a very good buyer,’ ” says Steen Kanter, who spent 23 years at Ikea as a senior executive and now runs Raleigh, N.C.-based consultancy Kanter International. He adds that he still proudly sits on an Ikea sofa he bought in 1986. “The throwaway idea has more to do with people growing out of something, as opposed to a product that doesn’t last,” he says.

For critics, however, the net result is the same. The downside is the potential for a big environmental footprint. Ikea is already the third-largest consumer of wood in the world after Home Depot and Lowe’s—both of which sell actual lumber—and has been accused by some environmental groups of using wood logged from old-growth forests in Russia. It’s also clear that, peak home furnishings or not, Ikea’s hunger for raw materials can be expected to grow alongside its global expansion.

But it’s also true that few companies have embraced the mantra of sustainability as strongly as Ikea, particularly in recent years. The company claims to be well on its way to becoming “forest positive” by 2020. That means using only wood that’s either recycled or has been certified as responsibly harvested by the Forest Stewardship Council, a not-for-profit that advocates for responsible forest management. Similarly, Ikea claims 100 per cent of its cotton now comes from sustainable sources while all the lighting sold in its stores is LED or LED-compatible. Two years ago, Ikea Canada even purchased a 20-turbine wind farm in Pincher Creek, Alta., promising the facility would produce more electricity than Ikea uses in all its Canadian stores. And that new store in Halifax? It will be powered by rooftop solar panels and heated and cooled by geothermal energy when it opens for business in two years.

But what about all the waste created as consumers toss their old Ikea furniture to the curb and replace it with the latest affordable designs? Ikea points to several initiatives under way in various countries that, depending on their success, could one day be applied to the global chain in pursuit of a more “circular economy.” They include a “second life” program in France that encourages customers to return, resell, recycle or donate used furniture and a “buy and sell” section for Ikea furniture on its Swedish website. “We’re really looking into it,” Sjostrand says, adding that Ikea doesn’t rush into anything until it’s been thoroughly tested. “We don’t think sustainability should be a luxury for the few. It should be for everyone.”

In the meantime, Ikea will continue to do what it does best: sell more stuff to the masses.


 

Have we hit ‘peak stuff?’ Ikea says there’s röom to grow.

  1. I have some ikea pieces that have lasted at least 6 years, some were bought used too. I would never try to take apart and reassemble anything made of particleboard, but as long as you treat it right I don’t see why it shouldn’t last a long time. I like that it’s cheap and simple, fits easily into any style apartment.

  2. Q: What did Mr. Kamprad do before 1943?

    A: (Clue) It was a little more than selling pencils.

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