Choosing Memphis: the impact of IKEA

The announcement of a proposed new IKEA store in the Memphis area was greeted this week by much fanfare from the local community.

IKEA confirmed its intent to open a Memphis store in fall 2016 that will employ 235 people.

The Swedish home furnishings retailer is seen as a world-beater in the retail industry. It's a huge 'get' for Memphis, in terms of both prominence and real economic benefit.

IKEA--known for good design and function at low prices--will build its new store in the Wolfchase area of Memphis, on 35 acres along Interstate 40 and behind Costco and Dick's Sporting Goods on Germantown Parkway.

The 269,000-square-foot megastore will have 1,000 parking spots. It also will include a 300-seat restaurant that will serve Swedish specialties such as meatballs with lingonberries and salmon plates, as well as American dishes.

Store construction, which is slated to begin in fall 2015, will generate about 500 jobs, according to IKEA officials. The retailer will seek tax incentives for the project, and couched the announcement by saying it is "contingent upon receiving all government approvals."

The Memphis IKEA will be the first in Tennessee and the surrounding area. Currently, the closest IKEA stores to Memphis are in Atlanta and Frisco, Texas. The retailer is under construction on a store in St. Louis, which is set to open in fall 2015. IKEA currently operates 40 stores in the U.S.

High Ground News reached out to local real estate professionals to get their take on the big announcement.

Fletcher Elkington, Vice President of Development, Elkington Real Estate Group
"When I first heard rumors of this a few weeks ago, I did not believe it. 

"It is important because it is a major regional retail destination. I believe it will have more economic impact in this city than Bass Pro in the Pyramid. For once, we will have people from Nashville driving here to shop."

Gary Shanks, The Shopping Center Group LLC
"Due to the competitive nature of landing a retailer such as IKEA, it is very exciting for Memphis. They have a great reputation and will draw in customers from afar. With Wolfchase being a super-regional trade area, it is an ideal location for them."

Shawn Massey, The Shopping Center Group LLC
"IKEA is an iconic retail brand. They do not open stores randomly, like many retailers. A lot of due diligence would have taken place that would ensure that Memphis was the right choice. You are talking about a store that dwarfs a Sam's Club or Costco or the size of 1.5 Walmarts.

"By choosing Memphis, it solidifies the importance of Memphis as a retail market that has opportunity to grow a lot more. Because IKEA has chosen Memphis, other retailers will look at the Memphis opportunity. We will see other quality national retailers who may have been on the fence with Memphis, and this may be the catalyst to get them to town.

"IKEA will raise in some way the quality of life of our community. It will provide many families the opportunity to get quality furniture and home décor items at a value price. When a company is looking to locate its office or manufacturing facility in a community, the quality of shopping has a dramatic impact. When we bring retailers like IKEA, Bass Pro, Sprouts and others to Memphis, it only will open more doors across a full spectrum of economic development."

Larry Jensen, President and CEO, Cushman & Wakefield | Commercial Advisors
"IKEA is iconic in big box retail, and this news affirms our regional market of 2.5 million people as a great retail market. I can't wait to go there!"

Carson Claybrook, Vice President of Retail Brokerage Services, Cushman & Wakefield | Commercial Advisors
"IKEA choosing Memphis is absolutely important for our city and the surrounding area. IKEA is a destination retailer that will draw customers from roughly a 100-mile radius. That draw will trickle down to other retail businesses in the area as well as generate additional tax income for the city. 

"IKEA will also be adding jobs to the area, which is always positive. The fact that Ikea chose us initially over Nashville or Little Rock validates our city as a serious contender for retailers of the same caliber when they are making decisions on their future expansion plans in this region."

Barry D. Maynard, Tenant/Landlord Specialist, Loeb Realty Group LLC
"IKEA would be a great addition for the Memphis area, as its companies design and sell ready-to-assemble furniture, appliances and home accessories and are the largest in the world. Their price points are very attractive yet high quality. Memphis is a town that thrives on good product at a reasonable cost basis. I see Memphis really embracing IKEA. And our big box real estate opportunities are less expensive than competing markets, which should make IKEA love our market even more."

Phil Trenary, President and CEO, Greater Memphis Chamber
"The location of IKEA in Memphis is a significant win for our city. Memphis is an authentic place filled with very engaged young professionals who are passionate about growing Memphis and will welcome a company like IKEA with open arms." 
 

Read more articles by Jane A. Donahoe.

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