IKEA restaurant: Why is a furniture-maker selling food?

The idea behind offering food options was that once you feed customers they stay for longer.

By BusinessToday.In  
Thursday, September 6, 2018

Not very long after IKEA's first store in India was opened for business, the Hyderabad store faced what is every customer as well as food-seller's nightmare. A customer who had ordered vegetarian biryani at IKEA's restaurant, found a caterpillar in his dish. It created quite a furore once the man tweeted a picture of his food and was followed with a fine by civic authorities.

But really, what business does a furniture-maker have running one of the biggest restaurants in the country?

Turns out, the answer is 'a lot'. IKEA's restaurants worldwide, in fact, contribute significantly to their revenue. Moreover, how else to lure in customers in a food-loving country like India than to open a 1000-seater restaurant?

Nevertheless, IKEA still reserves its focus for furniture. After all, that's what they set out to sell. The idea behind offering food options was that once you feed customers they stay for longer. They make decisions about purchases over food without leaving the store.

As reports mention, IKEA initially did not even notice how well their eateries were doing because their furniture were also flying off the shelf.  "This might sound odd, but it's almost something we didn't notice," said Michael La Cour, IKEA Food's Managing Director to Fast Company last year. In 2016, IKEA made $36.5 billion in revenue and the sale of food got lost in such a big number. In 2017, IKEA made $42.2 billion in revenue. In fact, 30% of IKEA's customers visited their shops just to eat, they suddenly discovered.

La Cour further adds that it is only when he started putting their food sales in context of other food companies did he realise that their food business is not so small after all. So, they started applying the same thought process to their food business as they did to their home-goods arm. They applied the same principles of "democratic design" to the menu as well and emphasised on sustainability, low prices, high quality and elegant form.

Not only did their restaurant business take off full swing, IKEA also gradually became Sweden's largest exporter of ligonberries.

However,the Swedish giant's most popular offering is their meatballs that have earned the moniker of 'the best sofa-seller'. They offer variations of their meatballs across all their global restaurants. The usual fare at IKEA restaurants consist of meat and seafood and fish dishes, vegetables and side dishes, beverages, sauces, dairy products, pastries and cookies, snacks, chocolates and candies.

Their Hyderabad restaurant has a slightly tweaked menu to suit Indian taste buds and preferences. For instance beef and pork have been replaced by chicken and salmon. Additionally there are items such as dal makhani, green salad, salmon fillet, veggie balls, fruit salad, cakes, hot beverages and more.

The company now serves more than 650 million diners in more than 50 countries. In countries like the US, IKEA restaurants are quite popular and are preferred by many customers as they are considered better than many family-dining options.

So, while IKEA sells furniture, they do so with a little bit of innovation and a whole lot of food.

(Edited by Anwesha Madhukalya)

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