Ikea to Move into Speciality Grocery Market

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by: David Polinchock

I showed this article to Mitali and she had one question — will you have to put the food together yourself?

Following Wal-Mart's announcement it plans to expand operations into the rest of Europe, furniture retailer Ikea said it will move into the grocery market with its own-label products next year.

The advent of another big retailer in a market characterised by small margins and fierce competition, will provide another opportunity to food processors who do not sell their own branded products. That is, if they can cope with the buying power the two companies have to bargain down their prices.

Industry analysis Datamonitor says while Ikea's plan to expand its food division is an attempt at diversification, it is the inverse of the strategy adopted by retail giants such as Tesco and Wal-Mart, which have started to sell home furnishings to counter falling food revenues. The Swedish retailer plans to launch its own range of food products across its stores worldwide.

Datamonitor believes the Ikea food brand launch will be a successful stategy given the retailer's high profile among consumers. Although spending on mainstream food products is slowing, the same cannot be said of niche brands.

Ikea's plan to offer mainly Swedish delicacies, such as roll-mop herring and smoked elk sausage, will appeal to a body of consumers looking for more specialty offerings. 

Link: Ikea to move into speciality grocery market.

Original Post: http://blog.brandexperiencelab.org/experience_manifesto/2005/07/ikea_to_move_in.html