IKEA has invested £31.5 million across its Peterborough and Doncaster customer distribution centres to make online fulfilment more efficient and sustainable. It gives retail and logistics operators a costed example of automation and regional fulfilment being used together to cut packaging waste and delivery distance.

IKEA UK and Ireland reported that online sales made up almost half, 43.3 per cent, of its total UK sales in FY2026. Its Peterborough site now uses PackSize technology to package orders to size.

Peterborough receives £30 million over two years. The packaging technology cuts material use by up to 30 per cent and void fill by up to 60 per cent. It is expected to lift the share of parcels processed through automation from 47 per cent to 75 per cent in 2027.

Three drones and nests introduced in January scan each aisle in short cycles to support inventory management. IKEA says the upgrades will not affect staffing levels at the centre.

Doncaster receives £1.5 million to trial a regional fulfilment capability. It now serves customers in the Gateshead, Edinburgh and Glasgow areas, with Sheffield to follow, and IKEA estimates an annual reduction of 280 tonnes of CO2 from shorter delivery journeys.

David McCabe, CEO and CSO of IKEA UK&IE, said: “At IKEA, we are always on the lookout for new ways to do things better, and that’s true across the operational side of our business just as much as the innovative new products and services we bring to market.”

McCabe said the investments will make fulfilment smoother, reduce the environmental footprint and strengthen operational efficiency. He said the company is empowering its people to get the best from the new technologies.

For comparison, the ONS reported that the proportion of Great Britain’s retail sales made online was 28.8 per cent in September 2026, down from 28.9 per cent in August.

For the sector, pairing packaging automation with a closer regional hub signals that online-heavy retailers are treating fulfilment design as a cost and emissions lever, not only a delivery function.

Source: Furniture News / ONS