- Ikea is launching a new small-format store in downtown San Francisco this week.
- While other retailers are closing their stores due to security concerns, low footfall, and rising rents, Ikea is expanding its presence in city centers worldwide to reach more consumers.
Ikea is defying the trend of retailers leaving downtown San Francisco by opening a new store in the Mid-Market area this week.
While numerous chains have closed their locations near Union Square and companies like Meta and Salesforce have reduced office space in the district, Ikea sees potential in the city.
The rising rent prices and crime rates that have driven people away have negatively impacted the commercial real estate market, earning it the name “doom loop.”
However, according to Arda Akalin, the store’s manager, Ikea believes that it is still a viable place and aims to bring more jobs, people, and commercial activity to the Mid-Market area.
The new store spans three floors of the former 6X6 mall at 945 Market Street, covering an area of 52,000 square feet. It is significantly smaller than Ikea’s typical big-box outlets but will feature 27 fully furnished room settings. While it does not have a cafe, customers can still enjoy Ikea’s famous Swedish meatballs at the deli.
This small-format store is part of Ikea’s strategy to cater to small-space living in city centers. Similar stores have already opened in London, Paris, and Mumbai, usually located in malls owned by Ikea’s parent company.
In April, Ikea announced a $2 billion investment in the US market, including plans for 17 new stores over the next three years and upgrades to existing sites. The new Mid-Market store will complement Ikea’s two full-size stores in the Bay Area.
The city officials hope that Ikea’s presence will attract more shoppers to the area and inspire other retailers to follow suit.
Insider reached out to Ikea for comments but did not receive an immediate response as it was made outside normal working hours.
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