Why IKEA Is Killing My Finances

I consider it a small miracle that we made it out of IKEA after only spending $200 this weekend.  The Swedish furniture giant usually has a way of sucking up our discretionary income like no other store.

This time, with a bit of assembly (and a few thumb blisters) we had a new bookshelf and some other knick-knacks for the upstairs media room and our daughter’s play room.

You see, we’re undergoing a bit of lifestyle inflation since moving into our new house.  Or as my wife calls it, redecorating.  We’ve upgraded from a 1,200 square foot, 2 bedroom and 1 bathroom home to a 2,150 square foot (3,000 if you include the undeveloped basement) 3 bedroom, 3 bathroom home.

And IKEA stands to benefit the most as we continue to fill up our new spaces.

Shopping at IKEA

IKEA clearly knows how to get us to open up our wallets.  With 280 stores in 26 countries, the IKEA Group generated over $23 billion in sales last year.

Picture wandering through a nearly 400,000 square foot maze of living room furniture, kitchen decor and bedroom sets.  There are only 11 IKEA locations in Canada (soon to be 12 next year, lucky Winnipeg!), and they are massive destination stores built on keeping customers there as long as possible with an endless line of products, a supervised kids play area, and those famous $2.99 Swedish meatballs.

Living in Lethbridge, our closest IKEA is 2 hours north in Calgary.  A trip to IKEA is a day long excursion for us and by the end we just hope that all of those flat boxes we bought fit in the car for the trip home.

Why Do We Enjoy It?

One result of IKEA’s rat-maze design is that 60% of the things people buy there were not on their original shopping list.  I can attest to that.  I don’t think we’ve ever been to IKEA without finding some “must have” item, from the Billy bookcase to those cool cheese grater containers.

According to the video below, this confusion is carefully planned and orchestrated by IKEA.  It’s really long, so watch the first minute or so and then skip ahead to around the 25:30 mark for the good stuff:

This lecture makes some very interesting points about why IKEA is so successful:

Q: Why do people go there?
A: The $10 table might have something to do with it…but I think there’s a deeper issue

  • IKEA is highly disorienting and yet there is only one route to follow
  • Your time allocation is used up in the showroom
  • By the time you get to the marketplace you feel licensed to make impulse purchases

When you drive for 2 hours to get to the store and then spend an hour-and-a-half in the showroom, the odds of you walking out of there without spending a few hundred dollars are about as good as finding pre-assembled furniture in IKEA.

We knew that upgrading our house was going to cost us more than just a bigger mortgage payment.  Still, we hope to keep our decorating under control and that starts with limiting our trips to IKEA to maybe once or twice a year.  Luckily we don’t have an IKEA that close to us, so we really need to go out of our way to go up there.  I’m hoping they never decide to build one in Lethbridge, although I’m sure my wife disagrees.

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  1. changeonabudget on October 24, 2011 at 12:42 am

    Totally agree that Ikea sucks wallets dry. I’m lucky I don’t have a car so it forces me to really decide if I want something enough to convince one of my friends to take me. Many people get Ikea furniture as their ‘starter’ furniture and upgrade over time so there is usually tons of it on craigslist. I’ve gotten some pretty good deals that way. Ikea does such a good job of showing off a wide variety of really well-decorated “rooms” in the showroom and there is likely to be one that is similar to your style. Suddenly that bookcase you stopped in for needs coordinating items, lamps, pictures, rugs to complete the look. It’s like clothes shopping for women – once you get that new dress, you need new jewelry and shoes etc. Each item seems cheap enough that you don’t feel bad adding to the list but at the end it all adds up.

    • Echo on October 24, 2011 at 7:55 pm

      @changeonabudget – I think that our $200 bill consisted of about 12 or 15 different items. It definitely adds up at that rate.

  2. youngandthrifty on October 24, 2011 at 1:11 am

    Haha I have a $10 table!! We use it as our coffee table and it’s sort of scratched already.

    I am an Ikea addict and our home is pretty much all ikea. That place is addictive. I still find Ikea stuff expensive (but that’s just me) but so beautiful. We bought two ikea shoe storage cabinets and I absolutely love them. We also have a PAX wardrobe and love that too. The desk I am using right now is Ikea. LOL… they are good at taking my money!

    BF has to DRAG me (literally grab my hand and pull me through the store) to ensure that I don’t get lost “ooh-ing and ah-ing” at all the lovely displays.

    They give us cheap and delicious food to compensate for our exhaustion and time spent there. Did you know that the small Ikea food store in Richmond (the one that sells $1 ice creams and $0.50 hot dogs) made a HUMUNGOUS amount of profit? More so than any other food retailer, apparently.

    • Echo on October 24, 2011 at 8:01 pm

      @youngandthrifty – Sounds like you would get along well with my wife, she’s an IKEA addict too.

      We love our $10 table 😉

  3. schultzter on October 24, 2011 at 6:32 am

    There’s no doubt the stuff at Ikea is in-expensive but is not poor quality – I have a lot of Ikea furniture for over 10 years now. I think the trick is that a lot (everything?) is part of a set, so you buy one piece and then keep going back for more and more pieces of the set.

    However, the store near me has posted maps with the short-cuts clearly indicated. So you don’t have to wander the maze – you can go directly to the section you want and get out. Before they did that I know a lot of people (myself included) would cut in through a cash to grab what they wanted and turn around again.

    • Echo on October 24, 2011 at 8:04 pm

      @schultzter – There seems to be a perception that IKEA makes cheap stuff, but I’m under the impressiont that they are just as demanding as Wal-Mart when it comes to getting the best prices from their suppliers.

      We also have many pieces that belong to a set…and end up going back to complete the set.

  4. PKamp3 on October 24, 2011 at 7:59 am

    The closest Ikea to me is in Palo Alto – pretty close to me, (un)fortunately. Even if I escape with my wallet intact, I find myself there pretty frequently… the Ikea must be fed.

  5. My Own Advisor on October 24, 2011 at 10:12 am

    Good post. I hear ya.

    $10 LACK tables. $70 BILLY bookcases. What every home must have right? Well, most homes 🙂

    I try to avoid that place as much as I can. I love the stuff, I hate the dent it puts on my CC!

    The IKEA maze is all by design, and a very, very smart one at that!

  6. krantcents on October 24, 2011 at 11:27 am

    Don’t feel compelled to decorate all the rooms at once.

  7. retirebyforty on October 24, 2011 at 4:32 pm

    Hahaha, yeap it happens. Our IKEA have short cuts that you can go through if you know the lay of the store. We rarely go though the show room (2nd floor) anymore and usually goes straight to the market place/warehouse (1st floor.)
    I wrote about IKEA a few days ago too, check it out.

    • Echo on October 24, 2011 at 8:06 pm

      @retirebyforty – nice post, I like the Andre the Giant reference 😉

  8. Caroline Hanna on October 24, 2011 at 5:28 pm

    They are smart at Ikea! There is no point spending a lot of money on furniture for you children as it is so hard to keep things looking perfect! The showroom is by far the smartest aspect as I love to see everything all decorated. carehanna.blogspot.com

  9. UltimateSmartMoney on October 24, 2011 at 7:36 pm

    I agree that Ikea saves you money for most part and many shoppers love to spend money there. However, in the long run I’m not sure if it really saves you because the quality may not be as good, which means you end up spending again several years later. What I do is use craigslist to get used furniture. I bought several gently used furniture at faction of the original costs.

  10. T.M @ My University Money on October 24, 2011 at 8:29 pm

    I cannot believe the craziness for this store! I’m just too practical I guess. Living in Manitoba, the earth-shaking news that IKEA and now Target will be coming to town has the place almost as excited as bringing back the Jets! In fact, they are planning on re-doing the entire road grid in the area to benefit the new store and it is triggering huge real estate sales as other places try to soak up the inevitable traffic rush!

  11. Kathy on October 25, 2011 at 9:38 am

    So I’m not the only one who got one of those cheese graters! 😉 ….we got it over 5 years ago, visiting family in greater Vancouver, since we don’t have an Ikea in SK. We used to stop at the one in Calgary each time we made the drive to Vancouver…..it’s been years since we’ve made the drive (used to be a twice yearly thing 15 years ago) — found out Ikea moved the bloody store!

  12. Shannon on October 25, 2011 at 8:39 pm

    This was a great post! It’s true that you go for the great matching furniture for the $10 price tag…you just don’t anticiate walking out with 10 of those greatly priced items 😛 I live in Ottawa and we have a large IKEA about a 15 minute drive from my house. However, right beside it they are constructing what will be Canada’s largest IKEA. It is absolutely massive! Several stories tall, fancy dark glass walls, and unfortunately, it’s soon to have a lot of my hard earned cash!

  13. Cass on January 11, 2012 at 1:37 am

    This only shows that IKEA’s marketing strategy is effective. So customers really need to focus only on the things they need to buy and the purpose of going to the store because temptations are everywhere.

  14. Francoise on February 23, 2012 at 11:13 am

    As a reformed IKEA junkie, my advice is restraint, restraint, restraint!! You have a 3000 sq ft house (that’s enormous, did you really need all that?) and you can fill it up with an inordinate amount of stuff. I recently went to look at storage units because the cheaper (and dumpy) apartment(s) I am now looking at usually don’t have closets. I went through, picked up pamphlets and left without spending a dime. So what happens if you have to downsize? Do you really need that fifth set of sheets or towels, or an extra set of dishes, or the new lamp, etc etc. I am in the process of downsizing downsizing (to about 300 sq ft) and I am now in the process of letting go of things (through tightly clenched fists) and it’s heartbreaking and stressful and, worse, everytime I let something go, I think “There’s $x down the drain. I never did use that much.” Beware the influence of shopping psychology. And IKEA has it down pat.

  15. Janet on March 5, 2012 at 8:44 pm

    Should they ever build an Ikea in Lethbridge, I’m doomed. Calgary is far enough away, I can safely say I only ever go there maybe every couple of years, but Lethbridge is only 45 minutes away. Doomed. DOOMED, I tell ya!

  16. jojo on March 9, 2012 at 10:54 pm

    IKEA – Swedish for Crap

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