Swedish home furnishing retailer Ikea has unveiled plans to invest £31.5m ($42.1m) in its UK supply chain, covering automation at Peterborough and a regional distribution pilot in Doncaster.
The company will spend £30m over two years upgrading equipment at its Peterborough customer distribution centre.
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The plans include PackSize machinery that produces cartons matched to product dimensions, replacing a process in which employees measured items and assembled boxes manually.
Ikea said the equipment can reduce cardboard use by up to 30% and void-fill requirements by up to 60%.
It expects automated parcel handling at Peterborough to increase from 47% to 75% by 2027.
Three autonomous scanning drones, installed with docking bases in January, are also operating at the site to perform regular inventory checks across warehouse aisles.
Ikea said employment levels at Peterborough will remain unchanged during the rollout.
A further £1.5m is being used for a decentralised distribution trial in Doncaster.
The location now dispatches orders to customers in Glasgow, Edinburgh, and Gateshead, while Sheffield is due to be added.
The company added that the Doncaster change has added 80 employees at the site.
Online sales accounted for 43.3% of net revenue across Ikea’s UK business in fiscal year 2026.
Ikea UK and Ireland CEO and CSO David McCabe said: “These investments in our Peterborough and Doncaster customer distribution centres will ensure fulfilment is smoother than ever and reduce our environmental footprint—while positioning the business for long-term success by strengthening operational efficiency and supporting sustainable growth.”
Earlier this month, Ikea launched a second-hand marketplace in the UK and Ireland for Ikea Family members to buy and sell pre-owned Ikea products.
Sellers can scan eligible items to create listings, with the platform providing recommended prices, product images and measurements.
