Ikea: From tiny Swedish retailer to multinational giant

Ikea, the iconic retailer known far and wide for its flatpack furniture and delicious meatballs, is this year celebrating its 80th anniversary. 

Founded in a small Swedish town in the 1940s, the brand is now represented in 62 markets, with more than 450 stores attracting around 700 million customer visits every year. 

Throughout its history, Ikea has prided itself on providing high-quality furniture at affordable prices. As a result, its wide variety of products can be found in tens of millions of homes across the world. 

Today, the business is going the extra mile to become an even more sustainable operation, while staying true to its roots. 

The humble beginnings of Ikea

Ikea’s origins can be traced back to 1943, when Ingvar Kamprad – then just 17 years old – began selling goods like pens and wallets from his hometown of Älmhult, Småland. 

It is said that resourcefulness was, and still is, a key quality of the Småland people, and one that soon became part of Ikea’s genetic make-up. 

As a reward for performing well at school, Kamprad was grateful to receive a small sum of money from his father, allowing him to set up a company and start selling furniture from 1948. 

Ikea as we know it was born, with a commitment to keeping prices low but quality high. During the early days, this was put down to high turnover, direct delivery from the factory and very low overheads.

However, the cost of mail order transportation and damage rates was proving an issue. To solve this, the company instigated a flatpack revolution with self-assembly products which proved popular among customers. 

Kamprad’s next notable innovation came in the early-1960s, when he realised people were leaving his stores at lunchtime to eat elsewhere. Whereas in June 1960 only coffee and cold snacks were being served, six months later the Ikea restaurant offered á la carte dishes and hamburgers. 

The ‘60s also signalled the beginning of the organisation’s multinational growth. Stores opened in neighbouring Denmark and Norway, before further expansion went beyond Scandinavia to the Asia-Pacific region, Middle East and North America in the 1970s. 

Significantly, in the 1980s, Kamprad was keen to establish an ownership structure ensuring total independence and a long-term business perspective. Ultimately, his solution was to separate the ownership of the retail operation from the IKEA Concept and Ikea Brand to keep them in distinct business groups, operating under a franchise system. 

“From the very start, our aim has been to create the greatest possible financial security for employees and the various groups of IKEA companies,” Kamprad is quoted as saying.

In addition to high quality and low prices, function, form and sustainability are the three other values that Ikea has always held in the highest regard. These form the ‘democratic design’ concept, a term first coined at the Milan Furniture Fair in 1995.

Who’s in charge at Ikea?

At the helm of Ingka Group, which operates the majority of Ikea stores as a franchisee, is Jesper Brodin, who was appointed CEO in 2017. 

Brodin’s career with the company spans almost 30 years, having started out as a Purchase Manager in Pakistan back in 1995. He soon became Regional Purchase Manager for South East Asia, and then took on the tough assignment of Assistant to both Kamprad and then-CEO Anders Dahlvig.

Prior to his appointment as CEO, Brodin had progressed to become Managing Director of Ikea Sweden and the Range & Supply division, responsible for development of the product range and supply chain of the IKEA Brand. 

CEO at the Inter Ikea – the group of companies connecting Ikea franchisees with range development and suppliers – is Jon Abrahamsson Ring, who began his career with the organisation in 1998. 

Over the years, Ring has held various positions, including in the Ikea Canada and Ikea China retail businesses, and has also been assistant to Kamprad. 

In 2020 he stepped up from his role as Managing Director of franchisee Inter Ikea Systems to lead the Inter Ikea Group.

Ikea’s climate commitment

Ikea’s sustainability strategy is split into three pillars: healthy and sustainable living; circular and climate positive; and fair and equal.

The company’s ambition for 2030 is to inspire and enable more than a billion people to “live a better everyday life” within the boundaries of the planet.

Headline targets include: 

• Offer 50% plant-based main meals in restaurants by fiscal year 2025
• Only source renewable or recycled materials by 2030.
• Phase out plastic packaging, starting with all new products by 2025 and the rest of the range by 2028

Ikea is also committed to becoming climate positive by FY30 – in other words, reducing its greenhouse gas emissions more than the company’s value chain emits, without relying on carbon offsetting. 

In FY22, the climate footprint of the Ikea value chain was reduced by 12% compared to baseline year FY16.

Responsible for leading sustainability efforts at Ikea and the wider Ingka Group in Karen Pflug, who joined as CSO in 2021. This involves heading up the sustainability centre of expertise, which supports the company as it works towards commitments set out in the IKEA People and Planet Positive strategy.

Pflug is well accustomed to coming up with new ideas for the famous home furnishings business, where she has been able to improve raw material usage and design more sustainable products and merchandising solutions. 

Over the years, Pflug has led a host of major business transformation and change initiatives, with a strong emphasis on innovation, sustainable design and retail. 

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