Ikea going ahead with Cairo outlet

The IKEA store planned for Cairo is pushing ahead despite ongoing demonstrations and a change of government

The Ikea store planned for Cairo by Al-Futtaim will not be sidetracked by unrest in the Egyptian city and the transition to a new government, says a company official.

James McGowan, the store manager of Ikea Abu Dhabi, said the group was still pushing ahead with its Cairo store, which is due to open in early 2013.

"We are going ahead as planned," he said. "We are still interested, we haven't slowed down any of our works in achieving our expected dates. We are carrying on as normal. Obviously, if situations change then plans change. But at the moment, there is no change in our plans."

This comes ahead of Tuesday's opening of Ikea's largest store in the region on Yas Island.

The 33,000-square metre store, staffed by 265 employees, will have restaurants and a children's play area, called Smaland.

Mr McGowan expects the new store to attract 1.2 million to 1.3 million visitors in its first year of operation. This is a similar number to the patrons visiting the Ikea store in Abu Dhabi's Marina Mall, which will close once the Yas Island branch opens.

He does not anticipate a surge of new visitors to the Yas Island outlet because it is a standalone store, and the nearby Yas Mall is still under construction.

"Being attached to a mall, you get a lot more visitor flow," he said. "In the first year, don't anticipate a huge growth in visitor numbers. But as we get more developed, and Abu Dhabi starts growing out to this part of town, then we expect to get a lot more visitors."

Furniture and furnishings store sales in the UAE reached Dh6 billion (US$1.63bn) last year, representing 14 per cent of the total non-grocery sales in the country, data from Euromonitor International show. With expatriates accounting for 85 per cent of the Emirates' population, their need for furnishings upon arrival means this segment represents big business.

While Ikea sales continued to grow overall in 2009, there was a drop in sales in Dubai after the economic downturn, said Mr McGowan. But it enjoyed "single-digit" growth last year, a trend expected to continue this year.

"We're hoping to have a positive impact this year … the new store will definitely pick up in terms of sales, and will put us on the map for many people," said Mr McGowan

Al-Futtaim also has an Ikea store planned for Doha, due to open at the end of next year, which will be slightly smaller than the new Abu Dhabi outlet.

Qatar has been on many retailers' radar because of the Fifa World Cup in 2022, and the business expected to be generated by the tournament. Egypt was also a target market for retailers, with its growing middle-class population and economy. But with the ongoing demonstrations and unclear political landscape, some have chosen to hold off on their plans.

But Mr McGowan said he believed the market still had promise.

"We still want to operate in Cairo, we still see the potential there," he said. "We would love to be in the market … we just hope that all the issues that they are having are resolved so that we can carry on with our plans. It's still a good potential market for us."