Edward Mohr, Ikea Food Services: Shopper Sustainer

 
A value-driven, uniquely Swedish approach to keeping its customers refreshed has helped furniture retailing giant Ikea build one of Europe’s largest foodservice businesses (€1 bn plus worldwide). Edward Mohr, managing director, Ikea Food Services, discusses best practice sharing, logistical efficiency, service planning and brand management. And as a German formerly employed in hotel management, he gives revealing insights into Ikea’s distinctly Scandinavian corporate culture. Interview by Bruce Whitehall.
 
Outside of city centre department stores and large supermarkets, retailers gain little if any revenue or benefit from foodservice. How has Ikea Food Services (IFS) managed to make it such a major part of the Ikea business, with sales of over €1bn worldwide?
 
Mohr: Our role in IFS is basically to keep customers in the store. That stems from the far-sighted judgement of Ikea founder Ingvar Kamprad that “it is impossibleto do business with hungry customers”. Constant development has meant that foodservice is not just an add-on customer service. Around 3/4 of all shoppers use it and the food has a faster sales growth than the furniture.The huge size of shops and their merchandise range means that the average store visit is close to two hours with many customers coming some distance with a specific shopping list. But we also need to take into account people living or working close to the store who just want to grab and buy small items; finding an attractive offer to suit them can be a challenge. The key eating times are breakfast, lunch and evening meal but we also have inbetween or off-peak times when stores need to have very attractive offers based on low prices. Those make people stay. Visiting the restaurant helps them refresh and reconsider what they want to buy while having a break in their shopping tour.
 
How much does the provision of food outlets vary between different Ikea stores?
 
Mohr: All our stores combine a continuouswalk-through showroom layout (ba-sically a one-way flow with short-cuts, enabling shoppers to see the entire merchandiserange) with a series of three or four strategically located food outlets. In all cases, we have a main self-service restaurant which is always on the first floor and directly connected to the furniture showroom. Minimum size is 450 seats and the average close to 600 seats. We are also testing much larger restaurants in Russia, with up to 1,250 seats. Bistros are smaller counter service units on the ground floor close to the exit, offering a limited range of fast-food items, notably hot dogs, at sensationally low prices. Near the Bistro is the Swedish Food Market, a shop specialising in Swedish food and drink products. It showcases our roots and sells only products based on Swedish recipes and traditions. The concept is valid for the entire world except for Sweden but, as we are now converting from branded products to Ikea food label products, we also want now to establish a Food Market concept at our Swedish stores, stocking only Ikea-branded products.
 
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| 13 August 2010 |