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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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