Ikea has optimistically defied San Francisco’s debilitating business exodus and opened a new multi-story megastore in the Bay Area city.
The Swedish furniture giant appeared to buck the trend of major retailers like Nordstrom and Old Navy closing stores amid declining visitor traffic and rising crime.
Cheerful staff dressed in the brand’s iconic colors greeted large numbers of shoppers at the Market Street location on Wednesday, with the store decorated with blue and yellow balloon arches.
People walked around the 52,000-square-foot megastore yesterday and filled their baskets. It is located in an empty shopping center in the troubled center of the city.
San Francisco has become a hotbed of drugs and homelessness, leading tourists and business visitors to stay away from the once vibrant city.
Ikea has braved the business exodus from San Francisco and opened a new megastore in the Bay Area
People walked through the multi-storey megastore yesterday and filled their baskets
Cheerful staff dressed in the store’s iconic colors greeted large crowds of shoppers on Wednesday, with the store decorated with blue and yellow balloon arches
Despite the optimism, the first day of sale at the Ikea store was cut short due to a fire alarm.
Shoppers were evacuated and firefighters arrived on scene on Wednesday afternoon. Clearly someone was smoking in the store.
Ikea, known for its suburban warehouse-style stores, is pushing more urban stores in the US and promoting its online stores.
Tolga Oncu, head of retail at Ikea owner Ingka Group, said the company had developed a strategy with security firms on how to position the store’s entrance and exit.
They have also taken measures to stop crime without the presence of many guards.
The new small Ikea store plans to add a food deli, co-working space and spaces for other retailers to rent next year.
Oncu said: ‘We are very confident in our city approach, it is very complementary to our existing Ikea presence in that market.
“Last year we opened a store in the Gallerian shopping center in Stockholm, contributing to a 50% increase in physical visits to Ikea in a very mature market.”
Ingka Group, the main franchisee of brand owner Inter IKEA, bought the San Francisco location in 2020 and planned to open the store in the fall of 2021.
San Francisco has become a hotbed of drugs and homelessness, leading tourists and business visitors to stay away from the once vibrant city
Ikea, known for its suburban warehouse-style stores, is boosting more urban stores in the US and promoting its online stores
Along Market Street and Mission Street, homeless people gather in hordes in front of an IKEA store
The opening on Wednesday comes at a time when a growing number of stores have fled the area – as widespread theft and homelessness have led to even candy being forced to be locked inside the stores.
Westfield Mall announced last month that it had stopped making mortgage payments due to crime and declining sales – defaulting on its $558 million loan and returning it to the lender.
This was fueled by the decision by Nordstrom, the mall’s main tenant, to close next month — which Westfield blamed in large part on “unsafe conditions” and a “lack of enforcement against rampant criminal activity.”
Other major companies such as Banana Republic, Office Depot, Old Navy, H&M and Whole Foods Market have left the area or announced plans to leave in the coming months.
AT&T has announced it will close its flagship store on August 1, another blow to the city’s struggling retail sector.
Last month, Park Hotels & Resorts announced it was halting mortgage payments on two hotels, the 1,921-room Hilton San Francisco and the 1,024-room Park 55. through major challenges.’
An analysis of official figures and other research shows that San Francisco could lose hundreds of millions of dollars due to an exodus of businesses and the inability to recover from Covid-19.
A family with two young children makes their way through the filth and squalor at the intersection of Jones and Eddy Streets in San Francisco’s Tenderloin District
People use drugs in front of one of the many empty storefronts in downtown San Francisco on June 16, 2023
The tourists who still come cannot avoid San Francisco’s homeless problem. Here a tour bus passes by a tent town in the Tenderloin area
Homeless people on the street are seen in downtown San Francisco
The city has also suffered particularly badly from the surge in remote working following the pandemic, which has decimated visitor numbers in the Financial District and Union Square and left office buildings abandoned.
Office vacancy reached a record high of 31 percent in May, enough space for 92,000 employees.
In April, Salesforce said it will be moving out of the eponymous 30-story Salesforce East building downtown, which had employed about 1,000 employees before the pandemic.
Leaders estimate the situation will contribute to a budget deficit of $1.3 billion over five years. The decline in property tax revenues alone could cost nearly $200 million a year, according to a worst-case scenario prepared by the city’s chief accountant.
The city also faces rampant drug use, with many dealers plying their trade openly on the streets.
As a result, city figures show that there were more than 268 drug overdose deaths in the first six months of 2023 alone — a 41 percent increase from last year.