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The local market in Lithuania has been largely unaffected by IKEA’s coming to this Baltic country of 3 million people. On the contrary, the opening of the first IKEA’s outlet in the capital city of Vilnius this August has given a boost to the local furniture manufacturing and retail market, the largest news portal in the Baltic States, delfi.lt, reports.

According to the national statistics agency, Statistics Lithuania, sales of furniture, lighting equipment and other household articles jumped to LTL 119.3 million (EUR 34.5 million) in the third quarter of this year. Last year, this figure stood at LTL 93 million (EUR 27 million).

“IKEA’s entry to the market turned out to be a positive thing,” says Jolanta Almonienė, director of the furniture selling company “DeLuxe” with stores in the three largest cities of Vilnius, Kaunas and Klaipėda.

“In the beginning, the news [about IKEA’s arrival] had caused some kind of agitation. People rushed to that new outlet, checked what’s on the shelf and eventually returned to us,” she adds with self-confidence.

From the outset Mrs. Almonienė has had no concerns that IKEA’s arrival may impact her company’s future. “We focus mainly on the exclusive furniture of high aesthetic value and comfort. I guess this is something different from what IKEA offers.”

She also believes that Lithuanian furniture manufacturers can offer a wider range of products at a more flexible price than IKEA’s.

However, she admits that a few weeks before IKEA’s opening in Lithuania her company’s sales had come to a standstill.

"This was most visible in Vilnius and lasted for several weeks, as if people were waiting to see what is going to happen. But stagnation was brief and is over by now,” concludes Mrs. Almonienė.

Her story is echoed by the experience of another Lithuanian furniture maker, “Intermedia.” Edita Urbonienė, CEO of the company, says their sales in Vilnius had slowed down in August but have largely recovered since.

“Now everything’s back to normal, like in the old days,” she observes.

According to Mrs. Urbonienė, Lithuanian retailers have one particular advantage over IKEA’s stores – namely, a different mix of supply on their shelves.

She also acknowledges that local producers have benefited from the publicity that surrounded IKEA’s arrival to Lithuania.

"Every advertisement, no matter who’s behind it, increases the customer’s appetite for buying, she says, and in the end we all draw benefits from that.”

Eglė Marčionienė, regional head of the international retail brand “Jysk”, is also of the opinion that IKEA’s effect on the local market has been negligible.

“There has been no mounting pressure to revise discount policies or apply additional marketing tools. The flow of customers has not decreased either,” she points out.

For Raimundas Beinortas, President of “Lietuvos mediena”, local wood products manufacturers and retailers association, the positive impact of IKEA’s coming to Lithuania corroborates the other countries’ experience.

“That IKEA’s opening would not harm anyone but rather help the local market was evident long before the first outlet started its operations in Lithuania. When IKEA comes to a new market, retail trade here goes up by several dozen percent. IKEA acts like a catalyst that leads to an explosion in the whole market. Every furniture maker knows this axiom very well,” says Mr. Beinortas.

He recalls that similar trends were observed in the neighboring Poland and Russia.

However, he remains slightly cautious whether the current positive trends will be sustainable in the long run. According to him, seasonality is the factor that must be taken into account.

“Furniture sales usually to shrink during the summer and pick up when the autumn arrives,” reminds Mr. Beinortas.

“In this respect, Christmas is always the best season for furniture manufacturers and retailers. Growth in sales is the natural companion of Christmas.”

See the original unabridged text here (in Lithuanian)

Source: delfi.lt