Ikea is to close its Coventry store with the loss of up to 352 jobs. It is the first time the Swedish flat-pack furniture chain has closed one of its large stores in the UK since launching here 33 years ago.
Ikea said the site – one of the company’s first to be built in a city centre – was too expensive to keep operating, partly because it is set over seven floors.
Customers are also increasingly favouring large retail parks or online shopping, resulting in “substantially lower” visitor numbers than expected, which are continuing to decrease.
“These factors have led to the store making consistent losses,” Ikea added in a statement on Tuesday.
The Usdaw union said the news was “devastating” for staff, while local shoppers expressed dismay at Ikea’s decision.
Ikea has held up well until now in the face of competition from online rivals but its latest move shows it is not immune from changing consumer habits.
The company said it tried a number of initiatives to keep the store open but the location and the format of the store meant these were not successful.
Ikea is seeking to continue its recent push into more convenient city centre locations, but they are likely to be much smaller than the Coventry site. It opened its first smaller format store on Tottenham Court Road last year, with another planned for Hammersmith, West Llondon, in Spring 2021.
The company will enter a consultation over the future of staff in the Coventry store and said it hoped to retain people where possible.
Peter Jelkeby, country retail manager and chief sustainability officer for Ikea UK and Ireland said: “Although this isn’t an easy decision, this is the right decision for the long-term success of Ikea in the UK.”
Dave Gill, national officer for the Usdaw union, said the news was “devastating” for staff.
“We will now enter into meaningful consultation talks with the company to interrogate the business case for this proposed closure.
“Our priorities are to seek redeployment opportunities, minimise compulsory redundancies and secure the best deal we can for our members.”
Ikea has 22 UK branches, most of which are large and sited out of town – an approach that has shielded to some extent from the sharp decline in fortunes of Britain’s high streets.
Retailers are seeking changes to the tax system, arguing that it currently favours online-focused multinationals and penalises bricks-and-mortar stores.
The government is to cut business rates for thousands of pubs and small shops from April but industry groups are calling for a full review of the system for all premises.
Chancellor Sajid Javid has promised to hold a review, without providing details of its timing or scope.