IKEA, the Swedish furniture and accessories giant, wants to unfold a new store in the Nashville area.
The actual location, however, is still being decided.
The furniture chain will open its first Tennessee location this fall in Memphis. According to their American spokesperson, the ideal site in the Nashville area includes the same qualities as that 271,000-square-foot store.
“We continue to evaluate options in the Nashville area for a store,” spokesman Joseph Roth said. “The same criteria still exist — highway visibility, access and a big piece of land. That’s what we found in Memphis and that’s what we’re looking to find in Nashville and haven’t found anything yet.”
The company is looking for a location somewhere along Interstates 65, 40 or 24. New IKEA locations usually cover 25 to 35 acres of land and contain 250,000 to 400,000 square feet. The process can take years. IKEA spent a decade deciding on a site in St. Louis, for example.
Rumors first surfaced about a potential Nashville-area location about five years ago. But Williamson County does not seem like a front-runner.
The important things a retailer like IKEA looks for are: highway visibility, vicinity to a major interchange and easy and open ingress and egress, according to Austin Benedict, senior associate at CBRE Nashville’s Retail Services Group. Williamson County does not really have land like that available — at least not in retail, nor at the price that IKEA would like to pay.
Though, Williamson County does offer prime real estate.
“Williamson County is great, and this might sound like a funny analogy but you can think of markets the same way you think of restaurants,” Benedict said. “Typically, restaurants count on getting two rushes a day — say, breakfast and lunch, or lunch and dinner. Occasionally, you get a concept that hits all three meals — the Southern for instance, in downtown Nashville, hits all three. Williamson County is successful for the same reason — people wake up there, they stay there, they circulate through during the day, as well as you have people who stay at home during the day.
“Whereas Murfreesboro, for instance, has plenty of night-time population but around breakfast people leave, and lunch they are gone.”
However, IKEA does not necessarily need a “three-meal” location for a Nashville-area store.
“Simply being in Middle Tennessee will make IKEA successful — people will come find it,” Benedict said.
Williamson County, moreover, does not need IKEA, according to Benedict.
“The opportunity cost for Williamson County would be very high,” he said. “If I was going to analyze Franklin as a location for IKEA, the strength is it is close enough to Nashville and Murfreesboro and other surrounding areas to satisfy the need of the number of rooftops and college students; however, I would say there are a lot of challenges. Namely that Williamson County does not really need IKEA.
“If they wanted to attract them, they would need to make concessions — such as building a road to the site or making tax concessions — that do not necessarily benefit it in the long run. Currently, it can fill its locations without making such concessions.”
Recently, the county offered a nearly $2.2 million property tax concession to bring Schneider Electric USA to the area. Offering those concessions to Schneider makes sense, according to Elizabeth West McCreary, vice president of economic development for Williamson, Inc., because more than 1,000 high-income jobs come with the Schneider offer, which will pour money back into the local economy.
“While we are excited by the prospect that IKEA is looking at the Nashville region, we cannot speak to any conversations had with them,” she said. “It is worth mentioning that retail location strategies (e.g., IKEA) are typically different from manufacturing or office locations (e.g., Schneider).
“For example, retail companies tend to value consumer traffic and high household income. For companies looking to locate a headquarters or major office presence, they prioritize a skilled and educated workforce, quality of life factors, and an airport / road network that will connect them to other critical markets. There are other factors that companies consider, but fortunately, Williamson County typically fares well with the major data points.”