Ikea defies San Francisco business exodus as it opens its doors with new megastore … but will it buck the trend of big retailers like Nordstrom and Old Navy shuttering due to rising crime?

Ikea has optimistically defied San Francisco’s grueling retail exodus and opened a new multi-story megastore in the Bay Area city.

The Swedish packaged furniture giant appeared to be bucking the trend of big retailers like Nordstrom and Old Navy closing stores amid falling foot traffic and rising crime.

Cheerful staff dressed in the brand’s iconic colors greeted many shoppers on Market Street on Wednesday, with the store adorned with blue and yellow balloon arches.

People strolled through the 52,000 square foot megastore and filled their shopping carts yesterday. It is located in an empty mall in the struggling downtown area.

San Francisco has become a hotbed of drugs and homelessness, prompting tourists and business visitors to stay away from this once bustling city.

Yesterday, people strolled through the multi-story megastore and filled their shopping carts.

Smiling staff dressed in the store’s signature colors greeted many shoppers on Wednesday, as the store was adorned with blue and yellow balloon arches.

Despite the optimism, the first day of sales in the Ikea store was cut short – due to a fire alarm.

The traders were evacuated and the firefighters went to the site on Wednesday afternoon. It looks like someone was smoking inside the store.

Ikea, known for its suburban warehouse-style stores, is pushing more city stores across the United States and promoting its stores online.

Tolga Oncu, retail manager at Ingka Group, which owns the Ikea store, said the company had developed a strategy with security companies on how to position the entrance and exit of the store.

They also took steps to stop crime without many guards present.

The new small-format Ikea store aims to add a deli, co-working space and spaces for other retailers to rent by next year.

Oncu said: “We are very confident in our urban approach, it is very complementary to our existing Ikea presence in this market.

“We opened a store in the Gallerian shopping center in Stockholm last year, which contributed to a 50% increase in physical footfall for Ikea in a very mature market. »

Ingka Group, the main franchisee of brand owner Inter IKEA, bought the San Francisco site in 2020 and had planned to open the store in the fall of 2021.

San Francisco has become a hotbed of drugs and homelessness, prompting tourists and business visitors to stay away from this once bustling city.

Ikea, known for its suburban warehouse-style stores, is pushing more city stores in the United States and promoting its stores online.

Along Market Street and Mission Street, homeless people gather in hordes outside an IKEA store

Wednesday’s opening comes as a growing number of shops have fled the area – with widespread thefts and homelessness forcing even sweets to be locked up in shops.

Westfield Shopping Center said it stopped making mortgage payments last month due to crime and loose sales – defaulting on its $558 million loan and returning it to the lender.

It was sparked by the decision by Nordstrom, the mall’s anchor tenant, to close next month – which Westfield blamed in large part on “unsafe conditions” and a “lack of enforcement against widespread criminal activity”.

Other major companies such as Banana Republic, Office Depot, Old Navy, H&M and Whole Foods Market have either left the region or announced their intention to do so in the coming months.

AT&T announced the closure of its flagship store on August 1, which will deal another blow to the city’s struggling retail sector.

Last month, Park Hotels & Resorts announced it was halting mortgage repayments for two hotels, the 1,921-room Hilton San Francisco and the 1,024-room Park 55, saying, “Now more than ever, we believe the path of the San Francisco recovery remains obscure and elongated. by major challenges.

An analysis of official figures and other research reveals that San Francisco could lose hundreds of millions of dollars due to corporate exodus and its inability to recover from Covid.

A family with two young children navigate their way through dirt and squalor at the junction of Jones and Eddy streets in San Francisco’s Tenderloin neighborhood.

People take drugs outside one of the many empty storefronts in downtown San Francisco on June 16, 2023.

Tourists who still come cannot avoid the problem of homelessness in San Francisco. Here, a tour bus passes a tent city in the Tenderloin area

Homeless people on the streets are seen in downtown San Francisco

The city has also been particularly hard hit by the rise in remote working after the pandemic, which decimated footfall in the Financial District and Union Square neighborhoods and left office buildings deserted.

Office vacancies hit a record high of 31 percent in May, enough space for 92,000 workers.

In April, Salesforce announced it would be moving out of its namesake, 30-story downtown Salesforce East building, where about 1,000 employees worked before the pandemic.

Leaders estimate that this situation will contribute to a budget deficit of $1.3 billion over five years. Falling property tax revenue alone could cost nearly $200 million a year, according to the worst-case scenario drawn up by the city’s chief accountant.

The city also faces rampant drug use, with many dealers openly plying their trade on the streets.

As a result, city figures show there were more than 268 drug overdose deaths in the first six months of 2023 alone, a 41% increase from last year.