IKEA India is opening its second city-format store in Saket, Delhi, on July 30, as part of a strategy to increase reach through smaller outlets and digital channels. While the company continues to invest heavily in infrastructure, it reported a net loss of ₹1,325.2 crore in FY25 due to aggressive expansion spending. Investors may watch how this multi-store model affects future profitability and domestic sourcing targets.
Detailed Coverage
IKEA India is expanding its footprint in the National Capital Region by opening a new city-format store in Saket, Delhi, scheduled for July 30. This 30,000-square-foot outlet marks the company’s second city store in the region, following its initial e-commerce launch and subsequent physical store entry in West Delhi last year. The city-store model is designed to increase customer accessibility while the company continues to develop larger, full-scale stores in Gurugram and Noida.
Strategic Shift to Smaller Formats
The new Saket store will stock approximately 3,000 products, with 1,400 available for immediate carry-home. To provide the full experience, the company will offer access to its entire catalogue of over 6,900 items through its website, mobile app, and 'Shop by Phone' service. This approach is part of an omnichannel strategy that acknowledges the difficulty of traditional, large-format furniture retail in dense urban areas. By using smaller stores to reach consumers, IKEA aims to maintain momentum while infrastructure for larger developments takes shape.
Financial Context and Investment Phase
IKEA India remains in a significant investment cycle, prioritizing long-term market presence over immediate profitability. According to its latest financial results for the 2025 financial year, the company reported revenue from operations of ₹1,749.5 crore. However, its net loss widened to ₹1,325.2 crore. This financial performance reflects the substantial capital spent on store construction, distribution centers, and digital infrastructure. As of now, digital channels contribute approximately 30% of total sales, a key metric the company is using to gauge demand in new markets like Jaipur, Chandigarh, and Lucknow for potential future expansion.
Localisation and Future Growth
To manage costs and improve supply chain efficiency, IKEA is increasing its domestic sourcing. Currently, about 30% of its products are sourced within India. The company has expressed intentions to raise this percentage and introduce products tailored to the Indian market, such as furniture crafted from mango wood and teak. Additionally, the company is looking to grow its food services segment. The IKEA Café, which currently accounts for slightly less than 10% of total revenue, is a focal point for growth, with the company aiming to double this contribution in the next two to three years by offering a mix of Swedish and local cuisine.
The company’s stated goal is to reach approximately 30 stores across India by 2030. The pace and location of these store openings will depend on customer demand and digital sales patterns rather than a fixed geographic roadmap. The primary monitorable for investors and stakeholders remains the company’s ability to balance this capital-intensive expansion with a path toward narrowing losses, especially as it attempts to scale domestic sourcing and food service revenue in a competitive and price-sensitive retail environment.