• Cheery staff dressed in the brand’s iconic colors greeted swathes of shoppers on Wednesday, with the shop adorned with blue and yellow balloon arches 
• San Francisco has become a hotbed for drugs and homelessness – leading to tourists and business visitors staying away from the once-vibrant city 

Ikea has optimistically defied San Francisco’s grueling business exodus and have opened a new multi-floor megastore in the Bay Area city.  

The Swedish flat-pack furniture giant seemed to buck the trend of big retailers like Nordstrom and Old Navy closing shops amid falling foot traffic and rising crime. 

Cheery staff dressed in the brand’s iconic colors greeted swathes of shoppers at the Market Street location on Wednesday, with the shop adorned with blue and yellow balloon arches. 

People walked around the 52,000-square-foot megastore, filling up their baskets yesterday. It’s located in an empty mall in the city’s troubled downtown area.  

San Francisco has become a hotbed for drugs and homelessness – leading to tourists and business visitors staying away from the once-vibrant city.

Despite the optimism, the first day of sales at the Ikea store were cut short – because of a fire alarm.

Shoppers were evacuated and firefighters rushed to the scene on Wednesday afternoon. It’s understood that someone was smoking inside the store. 

Ikea, known for its suburban warehouse-like stores, is pushing more in-city shops across the US and are promoting its online stores. 

Tolga Oncu, head of retail at Ikea store owner Ingka Group, said the company had strategized with security firms on how to position the entry and exit of the store.

They’ve also taken measures to stop crime without the presence of a lot of guards.

The new Ikea small-format store aims by next year to add a food deli, a co-working space, and areas for other retailers to lease.

Oncu said: ‘We are feeling very confident in our city approach, it is very complementary to our existing Ikea presence in that market.

‘We opened a store in shopping mall Gallerian in Stockholm last year, which has contributed to a 50% increase in physical visitation to Ikea in a very mature market.’

Ingka Group, the main franchisee to brand owner Inter IKEA, bought the San Francisco location in 2020 and had planned to open the store in the autumn of 2021.

The opening on Wednesday comes as a growing number of stores have fled the area – as widespread theft and homelessness has meant that even candy has to be locked up in stores. 

Westfield shopping center announced it had stopped making mortgage payments last month due to crime and tanking sales – defaulting on its $558million loan and handing it back to the lender.

This was sparked by the decision from Nordstrom, the mall’s anchor tenant, to close next month – which Westfield blamed in large part on ‘unsafe conditions’ and a ‘lack of enforcement against rampant criminal activity’.

Other major firms such as Banana Republic, Office Depot, Old Navy, H&M and Whole Foods Market have either left the area or announced plans to leave in the coming months. 

AT&T announced that it will close its flagship store on August 1 in yet another blow to the city’s struggling retail sector. 

Last month Park Hotels & Resorts announced it was stopping mortgage payments on two hotels, the 1,921-room Hilton San Francisco and the 1,024-room Park 55, saying: ‘Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges.’

The city has also suffered particularly badly from the rise in remote working after the pandemic, which has decimated footfall in the financial district and Union Square areas and left office blocks deserted. 

Office vacancies reached a record high of 31 percent in May, enough space for 92,000 workers. 

In April, Salesforce said it will leave its eponymous 30-story Salesforce East building in downtown, where around 1,000 staff had worked before the pandemic.

Leaders estimate the situation will contribute to a budget shortfall of $1.3 billion in five years. The decline in property tax revenue alone could cost nearly $200 million per year, according to a worst-case scenario drawn up by the city’s chief accountant.

The city is also facing rampant drug use – with many dealers plying their trade openly on the streets. 

As a result, city figures show there were more than 268 drug overdose deaths in the first six months of 2023 alone – a 41 percent increase on last year.