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Ikea opened a new store downtown San Francisco on Wednesday, breaking the trend of closing stores in the city.
Ikea is the anchor tenant of a new mixed use development with retail, offices and restaurants on Market Street.
The city hopes that the furniture store in downtown San Francisco will attract shoppers and help other businesses to thrive at a time when many stores are closing and public safety is a growing concern.
Ikea's parent purchased the six-floor building for $260 million in 2020. The company plans to redevelop it. Ikea bought the building as part of its strategy to open smaller shops in downtown districts, after spending years building sprawling stores on the outskirts and suburbs.
Ikea is the first retailer in the new development to open. The 52,000 square foot, three-level store will feature 27 different options for apartment and city homes. Customers will be able buy smaller items and take them home, but larger furniture like couches and bookcases will have to be ordered for delivery.
London Breed, Mayor of San Francisco, said that the arrival of URL was a great news. It will bring jobs to the Union Square region and excitement. We are delighted to welcome IKEA as part of San Francisco’s future.
Public safety has been impacted by several videos that have captured the attention of people. These videos show robberies, assaults and other incidents. According to San Francisco Police Department statistics, violent crime rates in San Francisco are relatively low, but property crimes have increased since 2020.
The activity in downtown San Francisco this spring, measured by mobile phone usage, is 68% lower than its pre-pandemic level, which is the largest drop of any US city.
Retail closures have increased in San Francisco since Ikea purchased the property in 2020. The city's problems have also gotten worse. Coresight's market research firm, Coresight, has tallied that around 40 stores in San Francisco Union Square have closed since 2020.
Shopping mall operator Westfield announced in June that it would be giving up control of the San Francisco mall. The reason given was 'challenging operational conditions in downtown San Francisco', which had led to a decline in sales, occupancy, and foot traffic.
Nordstrom, the largest retailer in Westfield, announced a month ago that it would close both of its San Francisco shops.
San Francisco's in-store shopping has been hurt by factors such as remote working, affordability of housing, online shopping, and crime and safety concerns.
The number of vacant offices in the city is at its highest level in 30 years, and many have left permanently. According to US Census estimates, the population of San Francisco County decreased by over 60,000 people between 2020 and 2022.
San Francisco, meanwhile, has been struggling with housing affordability issues since well before the pandemic. This is contributing to the increase in homeless people in the downtown area.
Samantha Delouya, CNN's Samantha Delouya, contributed to this article.