Wayfair and IKEA double down on US expansion despite home furnishings slowdown
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The home furnishings sector ended 2025 with sales up 2.3 percent to $135.8 billion. Yet that modest gain lagged broader core retail growth of 4 percent. With inflation at 2.7 percent and household furnishings prices rising 4 percent, much of the increase reflected higher prices rather than stronger demand.
Consumer Edge data paints a cautious picture. US credit and debit card transactions show mid single digit spending declines across income groups during the year, with sharper pullbacks in the fourth quarter. Elevated mortgage rates and the housing lock in effect continue to suppress moves, a key trigger for furniture purchases. Discretionary spending remains under pressure.
In this constrained market, growth is coming from market share shifts, not expanding demand. Wayfair and IKEA are responding with aggressive but contrasting strategies.
Wayfair steps into stores
Wayfair has emerged as a dominant online force, holding just over 15 percent market share alongside HomeGoods, more than double IKEA’s 7 percent, according to YipitData. Online sales declined only 1 percent year over year in the fourth quarter, compared with an 11 percent drop in brick and mortar.
The company posted 7.4 percent US net revenue growth in the fourth quarter, reaching $2.9 billion, and ended the year with $11 billion in revenue. Nearly 80 percent of orders came from repeat customers, and about two thirds were placed via mobile devices.
Now Wayfair is expanding into physical retail. Its 150,000 square foot store in Wilmette, Illinois, opened in 2024 and reportedly attracted many first time customers. New large format locations are planned for Atlanta and Denver in 2026 and Yonkers, New York, in 2027, along with a smaller Columbus, Ohio, store.
Chief Executive Officer Niraj Shah has described stores as a powerful marketing tool that exposes shoppers to the full assortment. Wayfair spent $1.4 billion on advertising in 2025.
The expansion comes with financial strain. Wayfair recorded a $313 million net loss in 2025 and carries $3.2 billion in long term debt. In a fragile demand environment, execution will be critical.
IKEA builds omnichannel depth
IKEA is moving in the opposite direction. The retailer opened 14 US locations in fiscal 2025 and now operates 52 traditional large format stores and 18 plan and order points. It plans 10 additional openings in 2026, including a Los Angeles city center store.
US sales fell 4.3 percent to $5.3 billion, reflecting softer traffic. In response, IKEA is investing $2.2 billion in omnichannel capabilities to improve delivery, pickup and digital integration.
Online visits rose 4 percent to 458 million in 2025. Remote sales increased 6 percent, supported by its Remote Customer Meeting Point program. More than 3 million customers were served remotely, and planning appointments generated over $100 million in incremental sales.
Loyalty is another dividing line. Wayfair’s $29 annual membership accounted for 15 percent of US revenue, with about 1 million members. IKEA Family, which is free and rewards both purchases and engagement, has 25 million members and drove 56 percent of US sales.
Both retailers understand that the home market is unlikely to rebound quickly. Success will depend on delivering value, convenience and inspiration while protecting margins. As Wayfair builds stores and IKEA strengthens digital reach, the battle for market share in the US home furnishings sector is intensifying.
Sources