The announcement was welcomed by many New Zealanders concerned with high prices and limited selections for home furnishings, due in part to the costs of shipping to the island nation of 5 million people. Others worried that Ikea could spell doom for some local retailers and manufacturers.
Ikea said planning is still underway for the location, size and opening date of the store, which would include a restaurant featuring its famous Swedish meatballs. The company said it would employ several hundred New Zealanders and offer 7,000 products in the store and online.
The store will be run by the Ingka Group, which is the biggest retailer for Ikea within its franchise system. Ikea announced last month it was granting Ingka the franchise rights to New Zealand. "We're really looking forward to bringing the full Ikea experience to New Zealand, working in partnership with the local community to make Ikea a part of kiwis life at home, starting with Auckland," said Ingka Group Chief Executive Jesper Brodin in a statement.
Ingka in November announced plans to create a net 4,000 jobs over the next two years by expanding its online presence and opening new stores in city centers to complement its trademark larger stores in the suburbs. But it also planned staffing cutbacks.
It said the changes would create 11,500 new jobs and it would lay off 7,500 staff. Ingka operates 367 Ikea stores in 30 countries and employs about 160,000 of Ikea's total workforce of 208,000. Ikea was founded in Sweden in 1943. The Ikea Group has its headquarters in Leiden, the Netherlands.