IKEA is raising its average minimum hourly wage in the U.S. by
10%, following similar decisions by other retailers as competition
for lower-wage workers intensifies.
Starting Jan. 1, the Swedish furniture retailer will raise pay
for employees at its existing U.S. stores from $10.76 an hour to
$11.87 an hour, which is $4.62 above the current federal minimum
wage.
The company has been working to reduce staff turnover by raising
wages. Last year, IKEA's U.S. unit said it would calculate the
minimum wage by taking into account local living costs in each
market such as annual taxes and housing, food, medical and
transportation costs. That change, which went into effect in
January 2015, resulted in a 17% average wage increase for half of
IKEA's U.S. staff, according to the company.
On Wednesday, Lars Petersson, IKEA's U.S. president, said the
company is on track to reduce staff turnover this fiscal year.
IKEA said 42 of its 43 U.S. retail locations will increase their
minimum wage and about 32% of its hourly retail employees will
benefit from the change. IKEA's five U.S. distribution centers and
all nonretail locations will also have minimum wages above the
local living wage, starting Jan 1. The company said no employee
will have a minimum hourly wage below $10.
Separately, IKEA said it is considering ways to deliver more
full-time schedules and increase schedule predictability.
The moves come after Target Corp. in March said it would boost
pay to at least $9 an hour, following similar changes by Wal-Mart
Stores Inc. and TJX Cos.
IKEA currently employs 15,000 people in its 40 U.S. stores, five
distribution centers and three nonstore locations. The company is
opening new locations in Las Vegas; St. Louis; Memphis, Tenn.; and
Columbus, Ohio.
Also on Wednesday, IKEA said it is testing new click and collect
points in the U.K, where customers can order online and pick up in
person.
"Our customers are also telling us that with 18 stores in the
U.K., we are often too far away," said Gillian Drakeford, IKEA U.K.
country manager. She said the collection points give IKEA "the
opportunity to trial new ways of being more accessible to our
customers."
Click and collect has soared in popularity in the U.K., with
data from Mintel estimating that £ 5.6 billion ($8.8 billion) of
online orders were collected last year, a 42% rise from the prior
year.
IKEA's first collection point will open in Norwich, England,
this fall. In addition to picking up their online orders, customers
who come to the location can talk to home-furnishing experts for
advice when making more complex purchases, such as kitchens or
wardrobes, IKEA said. They can also "touch and test the product
range" at the collection point, which IKEA said will have a cafe as
well as products that customers can take home without having to
first order online.
IKEA said it would explore slightly different versions of click
and collect in various markets as it works to understand how
customers want to shop with IKEA.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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