Seemingly undaunted by Covid-19, Danish retail giant JYSK is forging ahead with plans to open 13 new stores in the UK and Ireland this financial year, with 2021 shaping up to be its “best year yet” according to country manager, Roni Tuominen …
In 2019/20, a year which saw JYSK’s UK and Ireland operations merged, the retailer achieved YoY sales growth of +74% (reaching €41m), and customer growth of +55% (to over 860,000), despite multiple periods of enforced store closure.
Although almost a quarter (24%) of its orders were placed online, stores remain very much at the heart of JYSK’s ambitious expansion plans (see October 2019’s issue fore more details), and a further five in the UK (and eight in Ireland) are being rolled out during the current financial year.
JYSK’s UK/Ireland growth during the pandemic is impressive – how far off hitting 2020’s original targets were you?
We actually managed to exceed the original budgeted targets for the year. There were moments when we didn’t think it would be possible, particularly at the beginning of the pandemic. However, people shopped online, and when stores re-opened, we adapted to make the stores safe for our customers and they were extremely busy. It was great to see our customers back in-store again.
What does the merger of the UK and Irish operations mean for JYSK and its customers?
For JYSK, it was a case of achieving synergies across the operations and improving on our concepts in stores. I hope that the end customer sees no real change, other than perhaps an improvement in how their local store looks when they visit – we are very focused on continuing to raise standards across the board.
Where and when are the new stores coming? And is the strategy still focused on the north?
The new stores opening this year will be in Bury, Stockport, Leeds, Barnsley, and Gainsborough, with Stockport and Bury opening early summer, and more following soon after.
For now, the strategy is to continue our focus in the north, since there is a lot of opportunity for more stores there. In fact, all the new stores will be within an hour’s drive of existing stores, enabling us to make the most of process synergies and shared resources. Of course, we also want to move further south, and over the next few years we’ll start to look for opportunities to expand there.
In Ireland, we’re opening eight stores, including new ones in Carlow and Tralee in May, then in Cork in June.
Has the business model changed significantly due to Covid-19?
Our business model has not really changed. In fact, I think our concept of having smaller-sized stores in many locations, combined with an ecommerce offering, has proven effective during the pandemic. Our store rollout and expansion ambitions have not changed – just slightly delayed.
Do you feel some of the consumer lifestyle changes brought about by the pandemic will be permanent?
I absolutely think some of the lifestyle changes and behaviour will remain. Consumers are more likely to care about the planet and the environment, and they want to try to shop local more often.
Sustainability will be a key component for retail across the board, and it is something that we are focused on at JYSK. During the summer of 2020 we introduced new sustainable packaging where we use less chemicals and no plastic, and by next year all new products will be in the new style of packaging.
We have also committed to using only FSC-certified wood in our products by 2022. Our sustainability initiatives extend into our store operations, too – we have already cut our per-store consumption of energy, with LED lights and energy-efficient distribution centres. We have reduced waste, sourced raw materials from more sustainable sources, and much more.
How did your stores manage to perform so well, despite tougher tier restrictions?
It’s hard to say really, but I think ultimately people felt safe when it came to shopping in our stores. That, combined with a big marketing effort in advance of the opening, helped ensure they performed well.
I also think it is down to consumer spending habits at the moment – many people haven’t been able to go on holiday this year, so people have turned to spending their money on their home instead.
Is JYSK adopting any new technologies this year?
We have been working for a few years now to update all store operations and processes to mobile devices, which makes life in-store much easier for our employees.
This integration requires massive investment in developing and updating our PoS system to allow for a completely seamless experience across our shopping channels, on top of being fully mobile. This new PoS system is currently being tested, and the rollout in initial test countries is expected a little later this year.
Given the material/import challenges facing the industry, are you planning to refine the pricing architecture to deliver better margin, and will any higher costs be passed onto the consumer?
Our business is known for having a great offer, and that is what we will continue to deliver to our customers. We have no plans to pass on any higher costs to the customer. Luckily, we are part of a large organisation with great buying power, so the impact on our margins will be minimal.
Why is Scandi product still in such high demand? And what’s new from JYSK in this regard?
Scandi is associated with great design and a sense of wellbeing. Customers are looking to create their own little haven at home, particularly now we’re all spending so much time in our homes, and so the high demand continues.
In terms of what’s new from JYSK, you can expect new furniture items from our Earthen Luxe range to help create a seamless indoor/outdoor vibe in your home – a trend we predict to be popular this year. We also have fantastic new outdoor furniture products coming early March, which we’re very excited to launch.
How have your previous retail experiences informed your approach at JYSK?
Working at various levels in retail organisations has given me a great insight into the daily challenges that our colleagues in-store face.
This year has come with its challenges, but also some great learning curves. The shifts in consumer and shopping behaviour have truly required dynamic and quick reactions in order to meet and serve our customers to high standards. Still, I cannot wait to get back out on the road visiting our stores again and meeting our staff and customers – once it is safe to do so.
How have you built on/diverged from the groundwork laid by your predecessor, David Ashton?
My goal when given the task to merge our two markets was, from the beginning, to build up and strengthen the organisation so the board would be fully engaged and committed to supporting our ambitious expansion plans across both markets.
Using the positive momentum we experienced coming out of the first lockdown, we have been working with all staff across the organisation to ensure our JYSK concepts are implemented 100%, that we take more controlled approach to our costs and investments, and that our brand is promoted more to raise awareness of JYSK in our current and upcoming store locations.
So far, the organisation has responded very positively to all the changes, and our results prove that the team is ready to support our expansion plans. For me this is very exciting, and I’m looking forward to continuing our efforts from 2020 into 2021 – knowing it will be our best year yet!
This interview was published in the February 2021 issue of Furniture News magazine.
