The new Mid-Market store will focus on "small-space living." Getty Images

Ikea opens a new small-format store in downtown San Francisco this week.

It comes as other retailers close sites amid security concerns, low footfall and rising rents.

Ikea is opening more smaller stories in city centers around the world to reach more consumers.

Ikea opens a new store this week in the Mid-Market area of San Francisco despite the exodus of retailers from the city's downtown.

More than a dozen chains including Nordstrom, Whole Foods, and H&M have left the area around Union Square since 2017, while companies like Meta and Salesforce have reduced office space in the district.

Some of the highest rents in the country have forced some people out of San Francisco, and rising crime rates has done the same for retailers. The resulting decline in footfall has hit the value of commercial real estate market in a phenomenon dubbed the city's "doom loop."

ADVERTISEMENT Advertisement

However, the Swedish furniture and homeware giant thinks San Francisco still has potential.

"We do feel it's a viable place," said Arda Akalin, the store's manager, told The Wall Street Journal. "Our ambition going into that location is to bring in more jobs, bring in more people, and bring in more commercial activity to the Mid-Market area."

The 52,000-square-foot store at 945 Market Street spans three floors of the former 6X6 mall and is far smaller than Ikea's typical big-box outlets. It will have 27 fully furnished room settings, Ikea said in a press release, toIt won't have a cafe, but its famous Swedish meatballs will be available in a deli.

The store is part of Ikea's strategy to open smaller stores in city centers that carry fewer products and are focused on "small-space living."

Smaller stores are already open in central locations in cities including London, Paris, and Mumbai, generally in malls that Ikea's parent company also owns.

In April Ikea announced a $2 billion investment in the US market, with plans for 17 new stores over the next three years and upgrades to existing sites.

The mid-Market branch will complement two full-size stores in the Bay Area. City officials hope it will bring more shoppers to the area and encourage other retailers to follow Ikea's lead.

"Our hope is that a store of this size and popularity will become an anchor in the community," a spokeswoman for San Francisco's mayor, London Breed, told the Journal.

Ikea did not immediately respond to a request for comment from Insider, made outside normal working hours.

Read the original article on Insider