Key Points:
- IKEA will close seven large stores across China starting February 2, 2026, to refocus its retail footprint.
- The retailer plans to open more than 10 smaller, targeted outlets in major cities over two years.
- Sluggish consumer spending and China’s property downturn prompted the strategic shift toward online and small-store growth.
Swedish furniture giant IKEA announced a major retail reshuffle in China aimed at bolstering its long-term position in the world’s second-largest economy. Starting February 2, 2026, seven of the company’s traditional large “big box” stores will close as part of a strategy shift toward more agile and focused retail formats.
The closures affect established outlets in suburban Shanghai, Guangzhou, and second-tier cities such as Nantong, Xuzhou, Ningbo, and Harbin. Each location has struggled amid weak consumer demand influenced by China’s prolonged real estate slump and broader economic unease.
China’s property market has struggled for years, dampening household buying power and curbing major furniture purchases. With slower wage growth and concerns about job security, many households have become cautious about big-ticket home investments. IKEA’s decision reflects these broader retail sector pressures.
Despite the closures, IKEA still sees China as a key strategic market. The country accounts for approximately 3.5 percent of the company’s global sales, and the retailer remains committed to growing its presence through alternative formats and channels.
Over the next two years, IKEA plans to open more than ten smaller, city-oriented stores focused on convenience and customer reach. Beijing and Shenzhen are priority markets in this new approach, with new outlets scheduled to open early in 2026.
The move aligns with IKEA’s broader pivot toward precision market penetration. Smaller stores aim to serve urban shoppers more directly, offering curated selections and easier access to products without requiring long trips to large suburban locations.
In addition to physical shifts, IKEA has strengthened its digital channels. The company operates flagship e-commerce shops and partnerships with major platforms, including a recent online store launch on JD.com. That digital expansion has become increasingly important as online sales grow faster than in-store traffic.
IKEA’s local leadership frames this strategy as a refinement rather than a retreat. By optimizing store footprints and investing in digital and small-format outlets, the company aims to build a more resilient and customer-centric business model in China.
China’s retail environment remains challenging for many global brands. Sluggish consumption, rising competition from local rivals, and an uncertain macroeconomic outlook have forced several multinational companies to rethink long-held expansion plans. IKEA’s shift mirrors broader industry trends toward efficiency and targeted investment.
The closures will not end IKEA’s role in the affected cities entirely. Customers can still access products through nearby stores, digital platforms, and omnichannel services, which the retailer continues to enhance to meet evolving shopping habits.
IKEA says the strategy shift allows it to reallocate resources where demand remains strongest. As smaller formats proliferate and online sales deepen, the company expects to capture new consumer segments and strengthen brand relevance in China’s competitive home furnishing market.
While the closures represent the biggest single retrenchment since IKEA entered China in 1998, they also mark a new chapter in how foreign retailers adapt to changing economic realities and shifting consumer trends in the world’s most populous market.
