TL;DR: IKEA’s new Oxford Street flagship marks a strategic pivot toward smaller, city-centre stores. The move challenges traditional big-box retail, emphasising convenience, flexibility, and urban integration. With Oxford Street undergoing a £90mn revitalisation and footfall increasing sharply, IKEA’s urban model could signal the future of retail for global brands.
IKEA has opened a new store on London’s Oxford Street, marking a significant evolution in the Swedish retailer’s approach to physical retail. The three-floor space, housed in the Grade II listed former Topshop flagship at 214 Oxford Street, forms part of IKEA’s wider strategy to test smaller-format, centrally located stores in global cities.
For decades, IKEA was defined by sprawling suburban warehouses—destinations customers drove to rather than passed by. But the Oxford Street venture symbolises a new approach: compact, urban-centric, and pieced seamlessly into the daily patterns of city life. It's IKEA’s most high-profile exploration yet into smaller-scale retail, aimed squarely at metropolitan consumers who value immediacy over expansive choice.
Why IKEA Chose Oxford Street Now
Oxford Street remains Britain’s most iconic retail corridor, despite recent store closures and declining prominence. Now, the area is undergoing a significant revival, underpinned by more than £90mn in combined public-private investment. John Lewis injected a much-needed £6.5mn into its flagship store in 2024, while Marks & Spencer is committing a substantial £800mn to reimagine its London retail estate. Footfall in early 2025 has risen 18.5 per cent year-on-year, reflecting renewed confidence in physical retail in central London.
The store’s opening forms part of a wider regeneration plan for Oxford Street. Mayor of London Sadiq Khan called the launch “a huge vote of confidence in London, in our economy and in our plans to rejuvenate Oxford Street and unlock its true potential.”
Ultimately, major brands are doubling down on retail—but success hinges on selecting the right format in precisely the right locations.
IKEA’s decision to plant a flagship here is therefore timely. But more than footfall, the choice is symbolic—Oxford Street signifies urban vitality. Tolga Öncü, Retail Manager at Ingka Group, summarises IKEA’s logic succinctly: “This store exemplifies our ambition to innovate our retail presence and bring IKEA to where our customers live, work, and socialise.”
IKEA’s Ritual of Retail Recalibrated for City Life
If you’ve ever wandered miles through a suburban IKEA to find a single frying pan, you know the friction. Unless you know the shortcuts — and few do — the layout dictates your experience.
By contrast, IKEA’s Oxford Street store is a deliberate recalibration. Londoners themselves helped shape roomsets, reflecting urban realities from cramped basement flats to shared balconies. The store features a Re-Shop and Re-Use section for second-hand IKEA items, and a compact broadcasting studio for local events and digital engagement. Shoppers can carry away smaller purchases immediately, while larger products remain available via the company’s robust delivery network.
This is not retail as usual—it’s an agile iteration designed for quick visits, spontaneous purchases, and repeat custom. Peter Jelkeby, IKEA UK’s Chief Executive, describes it as “the IKEA many know and love, adapted for the city.”
IKEA Oxford Street Opening Times
Around 130 staff will work at the store, which has a capacity of around 2500 people and IKEA's Oxford Street store will be open daily from 10am until 8pm and Sundays 12pm-6pm.
Takeaways for Retail Directors
In my view, IKEA’s move offers three important lessons:
Format shapes perception
IKEA’s compact urban store signals clearly who the brand wants to reach. Smaller formats can reposition a brand without expensive campaigns—demonstrating strategic intent simply by existing.
Location as strategic media
Choosing Oxford Street isn’t merely about footfall; it’s a statement. Brands must now see physical store locations as critical media assets, conveying identity, cultural relevance, and commercial ambition simultaneously.
Friction as choice, not necessity
IKEA traditionally embraced friction to drive impulse buying. The Oxford Street model deliberately reverses this, prioritising convenience and speed to match urban shopping habits. Retailers should consciously decide the role friction plays—if any—in their customer experience.
IKEA’s new format encourages lingering by choice, not necessity—making shopping a genuine pleasure rather than a forced march through a maze to replace the frying pan you know you’ll be buying again next year.
Nevertheless, the Oxford Street venture raises challenging performance questions. High city-centre rents, complicated logistics, and the need for sustained weekday footfall could pressure margins. IKEA is betting heavily on urban resilience; rivals will closely monitor whether this wager pays off.
In my view, Oxford Street is IKEA’s laboratory. And I am so pleased they’ve given this new format a go. If successful, the implications extend well beyond London.
Physical retail, we know, are not merely showrooms or warehouses, but intimate theatres, flexible platforms, spaces to dwell.
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