• 'The IKEA effect:' Will new Jacksonville location hurt small businesses?

    By: Phil Amato , Action News Jax

    Updated:

    It's perhaps the world’s most popular furniture store -- and it's coming to Jacksonville. 

    You can't miss the massive IKEA building under construction off I-295 and Gate Parkway. From I-295, motorists can already see a massive blue wall facing Gate Parkway. 

    IKEA has already created 500 construction jobs. When it opens later this fall, the retailer will employ 250 people.

    The closet IKEA to Jacksonville is in Orlando. 

    Ryan Rickman, who frequently travels from Jacksonville to the Orlando IKEA, said he's glad IKEA will soon be in his backyard.

    "We're really`excited about it. It's actually going to be right around the corner from our home," Rickman said.

    The 74-year-old Swedish retailer, known for inexpensive do-it-yourself furniture, claims it will also create the "IKEA Effect" by inspiring local interest in decorating and furniture.

    We investigated if that "effect" will be good for local business.  

    IKEA's decision to build in Jacksonville was strategic. The store could attract 2 million people in a 200-mile radius.

    But IKEA is already having an effect on low-cost furniture companies like Atlantic Bedding and Furniture on Southside Boulevard.

    Heavy competition and online shopping has stores like Atlantic Bedding and Furniture out of business. Justin Brown, whose company helps sell products left behind struggling companies, said he has seen how IKEA can disrupt a market. 

    "What we see nationwide is that when they come into a town, they're not adding to the marketplace," Brown said. "They're not adding to the pie. They're taking away from it."

    IKEA says Jacksonville is large enough to support many home furnishing retailers. Furniture Mart on Southside Boulevard welcomes IKEA's presence -- but not its product.

    "We do consider it kind of the dental floss of the furniture. You use it once and you throw it away," said Seth Gavronosky, Furniture Mart's general manager.

    Furniture Mart has been in business for 60 years. Its employees said they're not worried that the "IKEA effect" will impact their bottom line.

    "I don't really think it's going to affect us because it's a different market," said Furniture Mart designer Blair Dorsey.

    Millions love IKEA's concept. Its customers logged 750 million store visits in 43 countries last year and the company produced $38 billion in sales.

    "The average customer spends two to three hours shopping here," Monica Bogstad, the manager of the Orlando IKEA store, said.

    The stores are so large that maps are required to help customers guide their way around. Arrows on the floor suggest a recommended route.

    Each store stocks about 10,000 items. You can fit smaller products in a big blue bag. The larger items come in flat boxes from a warehouse shelf for you to put together at home.

    There's even free child care and an on-site restaurant that serves its famous Swedish meatballs. 

    "We said that the meatballs [are] the best sofa seller that we have," said Bogstad.

    Jacksonville's IKEA will be its 44th store in the U.S. and the 393rd worldwide.

    You can bet local competitors will be watching to see if the "IKEA effect" will help or hurt business.

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