IKEA: Its Mobile or Covington, LA (Valley, Foley: to buy, outlet malls, beach)

[Keeper]

IKEA just opened a store in Tampa. There is one in Orlando that has been opened a while. It would be nice to have one in AL but I don't see it happening any time soon. If it is a distribution center that is a different story. I have friends in N. AL who go to the one in Atlanta and they are not college kids so it must have appeal to even older folks.

[el chupacabra]

Originally Posted by psulions2007

The issue is where IKEA wants to go... not where Mobile wants it to go.

Another place that it could go (again, magical unicorns) would be near the Eastern Shore Center. The surrounding new developments would match the IKEA well.

FWIW, here are some cities that do not have an IKEA due to inability to support one:

Las Vegas, NV
San Antonio, TX
Birmingham, AL
Indianapolis, IN
Kansas City, MO
St. Louis, MO
Memphis, TN
Nashville, TN
Louisville, KY
Denver, CO (Though one is going to open in Fall 2011)
Cleveland, OH
Buffalo, NY


All of these places are significantly larger than Mobile.

That doesn't tell the whole story, you have to look at more than just the metro area where the store would be located. The closest IKEA to the Central Gulf Coast is in Atlanta. Mobile is centrally located along the Gulf Coast. It would draw people from NOLA all the way over through the Florida panhandle. And if you don't think people would drive 3 hours to shop at IKEA, you've never met people who shop at IKEA.

[psulions2007]

Originally Posted by el chupacabra

That doesn't tell the whole story, you have to look at more than just the metro area where the store would be located. The closest IKEA to the Central Gulf Coast is in Atlanta. Mobile is centrally located along the Gulf Coast. It would draw people from NOLA all the way over through the Florida panhandle. And if you don't think people would drive 3 hours to shop at IKEA, you've never met people who shop at IKEA.

IKEA doesn't open stores based on the line of logic that areas are "centrally located". I know people who would drive 3 hours to shop at IKEA... but those IKEAs are located in major cities. Mobile is not one of those. Based on your line of logic, there would be a lot more IKEAs in a lot more smaller metro areas (Why not throw one up in Fargo, ND or Boise, ID?)

As I said before, Kansas City is a perfect example. It's a metro of 2M people and could draw people from St Louis (which could have one of its own), Wichita, Omaha, Springfield, and Oklahoma. This area has a much larger population base than the Gulf Coast. Why don't they open one there? Because the area can't support it, among other things the company looks at.

As of now, people along the GC can go to Houston, Atlanta, or Tampa to shop at IKEA. That's how the company is set up.

[WestbankNOLA]

If I had to make an assumption, I believe that IKEA goes after a particular demographic.

L.A. (15M) gets 4 with 1 not too far away in San Diego (3M), while Chicago (9M) gets 2 along with D.C. (5M) which also has another 1 close by in Baltimore (2M). Philly with (5M) gets 2.

Houston (5M) and Dallas (6M) both get 1, while San Antonio (2M) and Austin (2M) share 1.

Miami (5M), Orlando (2M), and Tampa (2M) each have 1 and they're not too far apart.

Atlanta (5M) and Charlotte (1M) have 1 a piece.
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The mega cities (10+ million people) both have 4.
The next tier with (5 million people) seem to only have 1 with the exception of Philly which has 2.
The smallest tier (1-2 million people) tend to support 1 store, with SA and ATX sharing one.

Throw New Orleans (1 million people) and Mobile (400,000 people) and it's not adding up, unless they've decided to change their modus operandi overnight.

There are at least 11 IKEA's along the Bos-Wash corridor alone, so I don't think that distance plays that much of a role.

[Southsky]

Originally Posted by WestbankNOLA

Throw New Orleans (1 million people) and Mobile (400,000 people) and it's not adding up, unless they've decided to change their modus operandi overnight.

There are at least 11 IKEA's along the Bos-Wash corridor alone, so I don't think that distance plays that much of a role.

Not saying it's enough but there is more than enough of a population base along the gulf coast than the 1.4 million you've already mentioned... like I've said in another thread but there's 2.1 million people within 100 miles of Mobile (which doesn't even include New Orleans).

[psulions2007]

Originally Posted by Southsky

Not saying it's enough but there is more than enough of a population base along the gulf coast than the 1.4 million you've already mentioned... like I've said in another thread but there's 2.1 million people within 100 miles of Mobile (which doesn't even include New Orleans).

Kansas City. St. Louis.

[chj]

Originally Posted by Southsky

Not saying it's enough but there is more than enough of a population base along the gulf coast than the 1.4 million you've already mentioned... like I've said in another thread but there's 2.1 million people within 100 miles of Mobile (which doesn't even include New Orleans).

Within a 2 hour drive radius around Mobile there are 1.5 million people. that includes Greene, George, & Jackson counties in Mississippi, Santa Rosa, Escambia, & Okaloosa counties in Florida, & Escambia, Conecuh, Clarke, Monroe, Washington, Baldwin, & Mobile counties in Alabama. All of these places are less than 100 miles of Mobile and if you included some of the other areas that are outside of these counties but within a hundred miles of Mobile it is possible to have over 2 million people.

[rnc2mbfl]

It seems to me that a CSA of 2 Million is probably a trigger for an Ikea. Some exceptions will apply though. I am guessing that SA didn't get their own because of its proximity to Austin. On the other hand, Austin probably got it instead of SA because of stronger demographics. Another criteria would probably be how fast an area is growing and how many young people are moving to the area that need to "set up house".
In NC, Charlotte got NC's first Ikea though I could have made a strong argument for it being placed in southern Greensboro to centrally locate it in the Piedmont Crescent between Charlotte and Raleigh. But, it's obvious that is not how Ikea thinks and plans. With the Triangle's CSA heading toward the 2M mark this decade, I imagine it will be on the dock for its own Ikea before the end of the decade.
I doubt Mobile is even being considered for an Ikea despite the population within 100 miles. If I had to list the criteria that seems to be driving Ikea to expand to new markets, it would be as follows:

1. CSA at 2 million or adjacent CSAs that add to more (like Austin & SA)
2. Fast growing region
3. Lots of young professionals
4. Above average educational attainment
5. Disposable income
6. Access for supply chain (ports, interstates, etc.)
7. New housing starts/construction

At the end of the day, retailers have their internal "rules". For instance, when Macy's bought Hecht's sevearal years ago, it converted all the old Hecht's Stores initially. But, after a short period of time, it sold off the stores in markets under 500,000 because they don't operate in metros that small. Wilmington, NC lost its Macy's because of this policy. I am guessing that Ikea has its own similar set of criteria.

[Southsky]

Originally Posted by psulions2007

Kansas City. St. Louis.

247 miles.

Mobile. New Orleans.

143 miles.

Mobile. Baton Rouge.

200 miles.

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Adding up the metros in the "Gulf Coast megalopolis" and subtracting the Texas, western Louisiana, and non-Pensacola area Florida metros gives us 3.7 million. The distance is still less than that of KC-StL.

Baton Rouge CSA 809k
New Orleans CSA 1.3mm
Gulfport-Biloxi CSA 396k
Mobile CSA 595k
Pensacola CSA 455k
Houma CSA 202k
----------------------
3.7 million

...all within 200 miles of Mobile. You can't argue the population base isn't there. By the way, each of these metros borders at least one of the other metros.

Again, I am not and have not said this is enough for Ikea to locate here... I'm just merely allowing the door to remain cracked.

[annie_himself]

I believe Covington would be better financially for the business. The direct area is more populated (Northshore, southshore, Baton Rouge), many colleges (LSU, UNO, SU, SLU, Loyola, Xavier, Dillard, SUNO, etc), port of south Louisiana, and with college students and sprawl as rampant as it is in metro Baton Rouge and the northshore. I'd like to see Mobile get the store, but Covington has the direct population base.