Ikea expands in Ireland with distribution hub three times the size of Croke Park

IKEA has developed a vast new €85m distribution centre in Dublin that is three times the size of Croke Park and will drive expansion of its home deliveries business in Ireland.

he Swedish furniture giant expects the distribution centre to be making more than 300,000 deliveries in the first year of operation, with the figure almost doubling to nearly 600,000 within five years.

Eventually the plan is to be able to deliver up to three million items a year from the centre which will stock 8,000 products from the Ikea range. That’s more than 80pc of its entire catalogue.

The new customer distribution centre (CDC) will employ 120 people and extend over 457,000 sq ft – almost three-and-a-half times the size of the pitch at Croke Park. It will also result in lower carbon emissions by the retailer’s delivery vehicles. Ikea products are currently delivered to customers in Ireland via distribution centres in the UK and Belgium.

Ikea’s store in Ballymun on Dublin’s northside is the busiest in the world. The Irish Independent revealed earlier this year that Ikea also plans to open a second large Ikea store in Ireland within the next couple of years.

In the meantime, it has started opening a number of small plan-and-order stores around the country to serve customers. The latest such stores will open shortly in Portlaoise, and in Douglas, Co Cork.

Marsha Smith, the country deputy retail manager for Ikea UK & Ireland, told the Irish Independent that the distribution centre marks a key part of the group’s strategy to open a second major outlet in Ireland.

“It’s a really important building block,” she said. “There are so many finite things that we look to get right in order to proceed with expansion and this is definitely a critical component for us.”

Ms Smith said Ikea spends a significant amount of time researching new markets and potential new store locations.

“It’s look at where are concentrations of people, what’s the road infrastructure like, what are the shopping behaviours of people in that area,” she explained.

The new distribution centre will result in Ikea’s business in Ireland going from having the longest delivery time in Europe to having the shortest. Today, it takes at least six days for delivery. This will accelerate to just three days for truck deliveries and two days for parcel deliveries.

Ingka Investments, the investment arm of Ikea’s largest franchisee, the Ingka Group, confirmed on Thursday that it has bought the Greenogue Logistics Park in Dublin. It was developed by London-based Palm Capital, which has already secured clients at other facilities at the park. Construction of the logistics park was forward funded by US private equity group KKR and Palm Capital.

It’s the first logistics park ever bought by Ingka Investments in Ireland. Last year, Ingka Investments said it will build as many as 250 social housing units in Ireland with a €100m investment.

“We remain committed to – and are continually investing in – the future of our physical store in Dublin, but we want people to enjoy the Ikea experience no matter where they choose to engage with us,” said Jakob Bertilsson, country customer fulfilment manager at Ikea UK and Ireland.