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Ikea boss bemoans German bureaucracy

The Local · 20 Jan 2012, 14:46

Published: 20 Jan 2012 14:46 GMT+01:00

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The firm was ready to build new stores, but he said applications to build new branches, particularly in residential areas, were often hindered or scrapped all together due to protests from locals and politicians concerned about their area’s small businesses.

“If you take Germany, then we would have liked a further store in Stuttgart, but the discussion has already lasted years and years. And Lübeck took ages,” he said.

Ohlsson said he was disappointed by how slowly the company was expanding in Germany, which is Ikea’s biggest single market, accounting for 15 percent of its global business. There are already nearly 50 branches in the country.

"We want to be nearer to our customers and we're ready to start building new stores," Ohlsson said. "The government can stimulate investment in the company by speeding up the bureaucracy process."

Despite Ohlsson’s complaints, the company announced record profits of €2.97 billion in the last financial year. This is 10.3 percent more than the previous year

This has not discouraged the Swedish furniture giant, however, as Ohlsson announced the company is aiming global, hoping to open up branches in more than its current count of 30 countries.

“Over the coming years we want to grow responsibly and sustainably as a company” Ohlsson said. “Ikea is still relatively small in many countries. Like in China, for example. We have decided to aim for growth to triple there in the coming year.”

Ohlsson also told press that the furniture giant plans to build at least one new shop every year, for the next ten years. “I hope Germany will be able offer us our support in this,” he said.

Story continues below…

The Local/DPA/jcw

The Local (news@thelocal.de)

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Your comments about this article

17:36 January 20, 2012 by Fukushima University Berlin
IKEA promotes many good things, as well as very unhealthy food (there is an ingredients book by the cafeteria where you can see how many chemicals they use in food). I hope they make their food section healthy. Pasta and potato there are without chemicals, mashed potato is with chemicals. I buy many toys there, lamps/lights, organising boxes, and I have bought seven of those Billy bookcases like in the photo here, but paid 38Euro each-not 35. They are great, and I also have Besta bookcase from IKEA which is also good but short of shelves so need extra. I am a great IKEA fan, so I hope they solve their issues here. They do great creativity workshops for children in IKEA free of charge, and I hope they do more of that.
20:24 January 20, 2012 by Navigator_B
Most Ikea stores are huge and a lot of the products they sell are fairly large as well which often makes it's necessary to have a car to take the products away. For these reasons the stores really belong in industrial estates near motorways and not in normal shopping or residential areas. Who can blame residents for complaining about all the traffic that Ikea brings into their area? 

That Ikea boss is only whinging because Ikea has to satisfy local planning laws or 'bureaucracy' as he calls it, just like any other company that sets up a huge operation in any area.  
20:25 January 20, 2012 by ovalle3.14
Well, Herr Ohlsson, welcome to Germany.
18:28 January 21, 2012 by joysonabraham

I think most of his frustration is about the time it takes, not about the rejection rate, I guess. If locals don't like Ikea in their locality, reject the request immediately. So that the residents are happy and the businessmen men can look for some other place as early as possible.

May be the way he expressed his frustration (as a system failure in Germany) could have been a bit mellowed. If Germany was chronic inefficient in dealing with businessmen how Germany became the hub of businessmen and prosperity.
11:08 January 22, 2012 by yasur
One little detail: IKEA is owned by a Dutch Foundation, Profits are funneled to their Luxemburg Corporation and on to the Swedish owners(living in Switzerland) bank in Lichtenstein, Their connection to Sweden nowadays it very thin. The owners sons that are running the company have never lived in Sweden nor do they speak Swedish
13:31 January 22, 2012 by joysonabraham

Does it matter whether they are Swedish or not. Whether their sons speak Swedish. If their products are good it will sell.

Its just like someone saying since the company is German all employees must be 100% German. These things makes sense only if the company decides to sell only to Germans.
06:57 January 23, 2012 by parografik
"American Local Reader Bemoans Ikea Shoddiness"
12:04 January 24, 2012 by zeddriver
It's the same in most countries. Apply for a permit. Wait for studies. Then you are told to resubmit your application as the first study took to long and things have changed. Then it comes to pass that the permit never had a chance for approval anyway. Turns out the local government was only interested in the fees associated with the permit application and pertinent studies.
20:02 January 26, 2012 by raandy
No it is not the same , Germany is full of road blocks , bureaucracy and delays that moving ahead in this wonderland is not that easy as Ikea has found out, "Your not in Kanas anymore Todo". go or suck it up and live with it.
18:02 May 3, 2012 by JDee
I have a love/hate relationship with Ikea, it's great that they brought a certain pragmatic design style to the masses but in recent yeas I've become extremely skeptical about the sourcing and health of their products.Basically they rely heavily on chipboard/particle board and the vast majority of their stuff seems to originate from China nowadays. In China they are chipping there way through ancient forest woods which are being smuggled from all over the world, there are no effective controls and I do not believe for a minute that Ikea can really trust the source of their wood. This should be obvious by the price of their products, in short they are too cheap.. Add to this a heavy reliance on petrochemicals for dyes, glues, laminates etc.. and the fact that all the chipboard emits formaldehyde which can have health effects for some people and it certainly takes the shine off.. I've spent a lot of money there over the years and I would really like it if they became a genuine force for good and sustainability, but my observation is that they are really merciless profiteers. Don't be fooled by the cuddly image! Also, sadly, most people don't seem to look after the stuff they buy at Ikea, and here in Stuttgart it is dumped on the pavement every week. So I've gone back to the idea of furniture being something that you invest in, treasure, care for and look after and not disposable consumer products.
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