November 1, 2024
Photo by Kina on Unsplash
Is IKEA’s First Stand-Alone Restaurant a Recipe for Success?
For customers who dreamed of turning IKEA’s food court into a full-fledged restaurant, their wish is now a meatball-filled reality.
After serving its popular Swedish meatballs since 1985, IKEA has opened its first stand-alone restaurant in Hammersmith, London, on the UK high street adjacent to a renovated store. This new location features 75 seats and self-service terminals, offering a menu of Swedish favorites like meatballs and plant balls at affordable prices. Breakfast options are also available.
Matthew Gould, market manager for IKEA London City, emphasized the restaurant’s role in enhancing the shopping experience. “We know how much our customers love the IKEA restaurant and we’re excited to celebrate the opening of our very first high street restaurant,” he stated in a press release. “Fans of our delicious dishes can recharge during their shopping trip with our famous Swedish meatballs, pop in for a traditional Swedish ‘fika’ break for coffee and a sweet treat, or find an affordable meal for the kids right on the high street.”
Buildd put together some speculative data last year to help demonstrate how IKEA’s entry into the food business is a strategic initiative designed to boost furniture sales. Typically located on city outskirts, many stores lack nearby dining options, prompting IKEA to offer affordable meals that encourage customers to spend more time in-store. Buildd quoted founder Ingvar Kamprad saying that “hungry customers buy less,” underscoring this approach.
Furthermore, IKEA’s food segment, which includes bistros and cafés, generates around $2.5 billion annually, according to Medium.
The Brussels Times also shared a survey last October, which revealed that IKEA’s Ghent, Belgium, location serves more meals than any other restaurant in the area, with approximately 400,000 orders each year. Notably, this figure is even more significant since many orders cater to multiple diners. With an annual footfall of 1 million customers, about 40% of those who visit the store also choose to dine there. A huge bonus is the appealing low prices of food items that are in the same ballpark as fast-food value meals.
Despite the casual dining experience — where patrons set and clear their own tables — IKEA’s focus is not on making a profit from its restaurant. The main goal is to keep customers in-store longer, encouraging them to fill their shopping carts while enjoying a meal; a concept that was introduced originally by department stores.
Prior to the opening of an official restaurant, many consumers have been interested in the idea of an IKEA restaurant. Eight years ago, a thread on Reddit suggested the concept, and another Reddit thread three years ago discussed IKEA food and polled shoppers about whether or not they stopped to eat. One thousand participants said they ate IKEA food before shopping, while almost 700 said they ate in IKEA after shopping at the retailer.
Also, many commenters mentioned how they went to IKEA just to eat the food or drink the coffee. Some even shared that they stop at the food court multiple times, ordering the meatballs when they arrive at IKEA and grabbing a hotdog after they finish shopping.
Though currently only available in London, the stand-alone restaurant may be an attractive choice for those who plan to shop at the adjacent IKEA as well as others who just want a quick, convenient bite to eat.
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Ian Percy
President, The Ian Percy Corporation
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
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Discussion Questions
How does IKEA’s food service integration challenge traditional retail strategies and impact customer engagement?
How might IKEA’s stand-alone dining experiences change perceptions of retail as destinations for shopping and social interaction in urban areas?
In light of experiential retail trends, how can IKEA use its food offerings to boost brand loyalty and create immersive shopping experiences?
Poll
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This is stand alone, but it’s also right next door to an existing IKEA store – so it’s not entirely independent. IKEA does a roaring trade from its in-store restaurants, which have a good reputation for quality and value for money. I see no real reason this stand-alone concept won’t work, especially as it will still pull in traffic from the store as well as directly from the high street. The real acid test would be to open a restaurant entirely independent of any IKEA store.
I’m with you. Based on the article, I was unclear on exactly how “adjacent” the restaurant was to the store. It is directly attached so I believe this is not such a radical addition to their portfolio; however, I think about the economics. The restaurant delivery model incurs higher labor costs + additional real estate burden. Unclear for me how this concept + the potential to cannibalize higher margin sales from the existing concept drives financial results.
I love an Ikea meatball, but the reason I eat there is because it’s convenient, cheap, and there is a place to park my cart.
But if I am finished shopping, there is no way I am going to checkout, load my things into the car and then go back to eat.
Shopping at Ikea is exhausting, so even if the restaurant is right next door, it’s a no-go for me.
Yes- shopping at IKEA can be exhausting, and the last thing I want to do is walk to the hinterlands back to my car and then go eat at a meatball emphasis (those meatballs are good) restaurant.
I need the nourishment in-store to keep going!
Good callout that the “stand-alone” restaurant is adjacent to an IKEA store. It really isn’t much different than being inside the store. That said, I think a truly stand-alone IKEA restaurant has potential, as IKEA’s fan base is strong, especially given that some customers visit their store solely to eat at their restaurant.
IKEA’s restaurant food is appealing enough to customers that the restaurant itself is a destination spot, and that’s part of the reason why stand-alone restaurants has a decent chance to survive and thrive.
In my opinion, if the stand-alone restaurants are easy to reach, park at, and be seated in reasonable time, it will be successful. Of course, that also depends on how well the restaurants are managed, and how good the food will be.
Who doesn’t love those meatballs?! Seriously, a fast-casual restaurant can add to the IKEA experience. They already have tremendous in-store sales, so testing a stand-alone location will be an interesting experiment. Even though the restaurant is next to an IKEA, it’s still a separate structure. As Mr. Saunders mentions in his commentary, the real test will come when the restaurant is far away from the store.
I mean, the delicious meatballs with lingonberries alone should be able to attract a wide audience. But they have other good food options and drinks too, at a very affordable price. This is a place where a family can go on a budget. Since these adjacent cafes would remain by the warehouse locations, its often not a place you can just quickly pop in, but lower cost real estate also helps keep the food and service costs down, so meals stay reasonable.
Neil makes the key point…it’s not really a ‘stand-alone’ at all. That said, if you have a passion for a relatively inexpensive meatball dinner but don’t want to deal with the IKEA labyrinth to get it, this is your answer. Creating a successful stand-alone, sit-down restaurant based more or less on a single menu item is tough. Raising Canes Chicken Fingers is the only one I am way too familiar with.
Gee, overthink this much? It’s a restaurant, not some kind of retail epiphany…maybe it will work out, maybe it won’t …, kinda like every other restaurant (well they’ve something of a head start, of course). As the in store variants seem to be loss leaders – something I assume won’t be the case with a stand alone – a big test will be the appeal with (likely) higher prices.
I had an answer based on the headline, but then I changed it after reading the article and found that they are not stand-alone. I think it’s a great ‘service’ addition to the core retail offering and may be the launchpad for further IKEA brand extension and new formats.
I love Ikea’s restaurant. I would eat there more often except… Shopping at Ikea, isn’t so fun. Parking, navigating the merch trail/maze to find the thing you were looking for, the long lines… kinda of a pain that I put up with with for special occasions- when I need furniture or a comforter. But once a year or so, when I do need those things, stopping at the Ikea restaurant is always on the agenda. And, often, the Ikea market to take some stuff home. I’ve never tried to navigate Ikea just to eat or shop for food, however. If this venture makes that more accessible, I’m in, and I’m sure I’m not alone. I think this will be successful. Ikea has a very solid menu, and the quality is great.
Ok, I have had exactly one meal at an IKEA and it was good. Putting a stand alone restaurant next door simply monetizes existing real estate, right? Assuming the execution is strong, this takes away some parking spaces (a customer inconvenience maybe?) and increases revenue.
Sounds good to me.
IKEA is creating an inviting space that encourages people to linger and engage with the brand. While this new model may not seem revolutionary compared to what they already offer, a standalone restaurant could help build loyalty as people return not just to shop but to enjoy a meal.
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This is stand alone, but it’s also right next door to an existing IKEA store – so it’s not entirely independent. IKEA does a roaring trade from its in-store restaurants, which have a good reputation for quality and value for money. I see no real reason this stand-alone concept won’t work, especially as it will still pull in traffic from the store as well as directly from the high street. The real acid test would be to open a restaurant entirely independent of any IKEA store.
I’m with you. Based on the article, I was unclear on exactly how “adjacent” the restaurant was to the store. It is directly attached so I believe this is not such a radical addition to their portfolio; however, I think about the economics. The restaurant delivery model incurs higher labor costs + additional real estate burden. Unclear for me how this concept + the potential to cannibalize higher margin sales from the existing concept drives financial results.
I love an Ikea meatball, but the reason I eat there is because it’s convenient, cheap, and there is a place to park my cart.
But if I am finished shopping, there is no way I am going to checkout, load my things into the car and then go back to eat.
Shopping at Ikea is exhausting, so even if the restaurant is right next door, it’s a no-go for me.
Yes- shopping at IKEA can be exhausting, and the last thing I want to do is walk to the hinterlands back to my car and then go eat at a meatball emphasis (those meatballs are good) restaurant.
I need the nourishment in-store to keep going!
Good callout that the “stand-alone” restaurant is adjacent to an IKEA store. It really isn’t much different than being inside the store. That said, I think a truly stand-alone IKEA restaurant has potential, as IKEA’s fan base is strong, especially given that some customers visit their store solely to eat at their restaurant.
IKEA’s restaurant food is appealing enough to customers that the restaurant itself is a destination spot, and that’s part of the reason why stand-alone restaurants has a decent chance to survive and thrive.
In my opinion, if the stand-alone restaurants are easy to reach, park at, and be seated in reasonable time, it will be successful. Of course, that also depends on how well the restaurants are managed, and how good the food will be.
Who doesn’t love those meatballs?! Seriously, a fast-casual restaurant can add to the IKEA experience. They already have tremendous in-store sales, so testing a stand-alone location will be an interesting experiment. Even though the restaurant is next to an IKEA, it’s still a separate structure. As Mr. Saunders mentions in his commentary, the real test will come when the restaurant is far away from the store.
I mean, the delicious meatballs with lingonberries alone should be able to attract a wide audience. But they have other good food options and drinks too, at a very affordable price. This is a place where a family can go on a budget. Since these adjacent cafes would remain by the warehouse locations, its often not a place you can just quickly pop in, but lower cost real estate also helps keep the food and service costs down, so meals stay reasonable.
Neil makes the key point…it’s not really a ‘stand-alone’ at all. That said, if you have a passion for a relatively inexpensive meatball dinner but don’t want to deal with the IKEA labyrinth to get it, this is your answer. Creating a successful stand-alone, sit-down restaurant based more or less on a single menu item is tough. Raising Canes Chicken Fingers is the only one I am way too familiar with.
Gee, overthink this much? It’s a restaurant, not some kind of retail epiphany…maybe it will work out, maybe it won’t …, kinda like every other restaurant (well they’ve something of a head start, of course). As the in store variants seem to be loss leaders – something I assume won’t be the case with a stand alone – a big test will be the appeal with (likely) higher prices.
I had an answer based on the headline, but then I changed it after reading the article and found that they are not stand-alone. I think it’s a great ‘service’ addition to the core retail offering and may be the launchpad for further IKEA brand extension and new formats.
I love Ikea’s restaurant. I would eat there more often except… Shopping at Ikea, isn’t so fun. Parking, navigating the merch trail/maze to find the thing you were looking for, the long lines… kinda of a pain that I put up with with for special occasions- when I need furniture or a comforter. But once a year or so, when I do need those things, stopping at the Ikea restaurant is always on the agenda. And, often, the Ikea market to take some stuff home. I’ve never tried to navigate Ikea just to eat or shop for food, however. If this venture makes that more accessible, I’m in, and I’m sure I’m not alone. I think this will be successful. Ikea has a very solid menu, and the quality is great.
Ok, I have had exactly one meal at an IKEA and it was good. Putting a stand alone restaurant next door simply monetizes existing real estate, right? Assuming the execution is strong, this takes away some parking spaces (a customer inconvenience maybe?) and increases revenue.
Sounds good to me.
IKEA is creating an inviting space that encourages people to linger and engage with the brand. While this new model may not seem revolutionary compared to what they already offer, a standalone restaurant could help build loyalty as people return not just to shop but to enjoy a meal.