Can IKEA breathe new life into the mall?

Ingka's push into malls has latterly been driven by the invention of a new compact-format IKEA store

- Trefor Moss

Many malls are struggling but IKEA is betting it can breathe new life into the troubled format.

Ingka Group, the operator of most of the world's IKEA stores, has assembled its own mall empire in recent years, spanning from China to Europe to the U.S., and says it wants to buy more locations as it aims to diversify beyond retail.

The company's blueprint is to anchor its malls with an IKEA store and seek to pull in more would-be shoppers with additions such as WeWorkstyle co-working spaces, Nordic-themed food halls and children's play areas inspired by outer space.

"People are looking for places that offer much more, not only shopping," said Cindy Andersen, the managing director of Ingka Centers, the company's real-estate arm. "If you bring in more reasons to visit, then people will still come." 

Many malls have been in decline for years as consumers shift toward local, outdoor shopping venues and buy more online. Foot traffic to U.S. malls was down 4% on average in 2023 from the prior year, and about 12% lower than 2019 levels, according to Green Street, a real-estate data provider.

Some retailers, tracking their audience, have been reducing their exposure to enclosed malls, moving instead into strip malls or downtown locations.

Even so, the IKEA operator is doubling down on the mall. Though it offloaded its 14 malls in Russia last year following the country's invasion of Ukraine, Ingka still has 38 malls in 15 countries.

Ingka opened its first mall, or meeting place as it calls them, in 1973 in Sundsvall, Sweden, together with an IKEA store. In recent years the company has expanded its real-estate business, opening a string of new malls, and says it is actively looking to buy and develop more locations, including in the U.S.

The company looks for malls with strong existing retail tenants but with development potential, Andersen said.