IKEA expands in Cebu despite global headwinds

CEBU, Philippines — Swedish home furnishing giant IKEA has officially announced its expansion in Cebu despite growing geopolitical tensions and a weaker global economic outlook, betting that the province’s booming housing market and rising consumer spending will continue to drive demand for home furnishings.

IKEA Philippines Country Retail Manager Ricardo Pinheiro said it will open its first store in the Visayas at Ayala Malls Gatewalk Central in Mandaue City later this year, marking the retailer’s first physical expansion outside Metro Manila since entering the Philippine market in 2021.

The move stands in contrast to a broader trend of corporate caution as conflicts in the Middle East, sticky inflation and weakening global growth cloud the economic outlook, prompting many businesses to scale back expansion plans and defer investments.

For IKEA, however, Cebu stood out as the most compelling opportunity outside the capital.

“When we look at our digital store, the biggest potential we have today outside Metro Manila is Cebu and Mandaue,” Pinheiro said. “Customers in Cebu have been asking us through social media and all our contact channels to open here.”

Pinheiro said the decision was driven not only by strong online demand but also by Cebu’s position as the country’s furniture and home furnishing hub, supported by a deep manufacturing base and a consumer market that places a premium on home improvement and interior design.

The 4,000-square-meter store — about the size of five basketball courts — will provide access to IKEA’s entire catalog of 8,500 products, with approximately 2,500 items available for immediate purchase. The outlet will feature 41 model room settings showcasing kitchen, bedroom and living room solutions tailored to local households.

The company will also introduce its signature Swedish food offerings, including its popular meatballs and food market products, to Cebu consumers.

The store will operate under a compact format concept that IKEA is testing globally as it seeks to penetrate high-growth urban markets without building full-scale warehouses. The Cebu branch will be the first of its kind for IKEA in the region.

The investment is expected to generate around 100 jobs, half of them directly employed by IKEA and the remainder through logistics, delivery and service partners.

The expansion shows multinational retailers’ confidence in Cebu’s long-term growth potential despite rising global economic and geopolitical risks.

Cebu remains one of the Philippines’ strongest property markets, supported by sustained condominium construction, infrastructure development and an expanding middle-income population.

IKEA’s arrival also reflects the trend of consumer-focused companies following residential growth outside Metro Manila, where rising urbanization is creating new demand for furniture, home improvement products and lifestyle-related spending.

By choosing Cebu at a time when many global businesses are reassessing capital expenditures, IKEA is making a long-term bet that the region’s housing sector and consumer market will remain resilient even as geopolitical tensions cloud the global economic outlook.

“We needed to be close to the home furnishing capital of the Philippines,” Pinheiro said. “Cebuanos have a passion for improving life at home, and that is exactly what IKEA is about.” — (FREEMAN)