Today Ikea U.S. announced today it will adopt a new minimum hourly wage structure for its retail employees beginning January 1, 2015, that will take the average minimum hourly wage in existing United States stores to $10.76, a $1.59 or 17% increase, and $3.51 above the current federal minimum wage. Also this week, Ikea officially broke ground for its future St. Louis store, which it has scheduled to open Fall 2015, it reported.
The 380,000 square-foot Ikea St. Louis will rise along the northern side of Interstate-64 and Vandeventer Avenue on nearly 21 acres in the City’s Cortex Innovation District, the retailer stated. The company will evaluate potential on-site power generation to complement its current goal of providing renewable energy to almost 90% of its U.S. locations. In addition, Ikea is working with Habitat for Humanity St. Louis and other local groups to recycle and salvage as much of the equipment, materials and parts in the sites existing structure as possible, according to the retailer.
“This location will help bring the unique Ikea family-friendly shopping experience closer to many St. Louis-area customers who currently can only shop at Ikea stores elsewhere or online,” Rob Olson, the retailer’s U.S. CFO, said in announcing the groundbreaking. “The store also will attract new customers from Missouri, Illinois and beyond who value good design, good function and affordable prices but have not yet had the chance to shop at an IKEA store.”
As the company expands in the Midwest, Ikea noted that a Kansas City-area store is on track to open this fall in Merriam, KS.
The wage increase will impact about half of Ikea U.S. retail co-workers, the retailer pointed out. The hourly rate, based on the Massachusetts Institute of Technology Living Wage Calculator, will vary based on costs in each market where a U.S. Ikea store operates. The company characterized the move as a departure from determining wages based on the local competitive circumstances centered on the needs of the employee.
“At Ikea, we are guided by our mission ‘to create a better everyday life for the many people,’ a vision that includes our co-workers, customers and the communities impacted by our business,” Olson declared. “The transition to the new minimum hourly wage structure is not only the right thing to do, it makes good business sense. We are basing our wages on our co-workers and their needs, rather than what the local employment market dictates. Our focus is to ensure that Ikea is a great place to work by providing an environment that develops our co-workers and also meets our customers’ expectations. All of this contributes to our business success.”