Ikea opens in San Francisco, bringing hope to a struggling downtown

“Like any major city, we know San Francisco has challenges, but we also know that people want to be here,” Breed (D) said at a Wednesday news conference. “As a result of opening Ikea here today … [the city is] showing our resiliency and our willingness to do everything it takes to bring back business to San Francisco.”

Lately, the narrative around this city has been grim: hollowed-out office buildings, a vexing homelessness crisis, and big chain stores such as Nordstrom, Old Navy, Gap and Whole Foods closing amid frequent crime and dwindling foot traffic. But the arrival of the Swedish furniture giant has brought a bit of joy and optimism to the downtown corridor, which has been largely ditched by the tech employees who once defined the area.

Ikea “not only creates an opportunity for people to shop, but it creates an opportunity for people to work,” Breed said. “That is important and a part of the fabric of San Francisco.”

While the city’s Mid-Market neighborhood — close to the iconic Union Square and one of the city’s cable-car routes — isn’t exactly San Francisco’s most famous tourist draw (there are no sea lions, and the burritos are expensive), it’s still seen as an important indicator of the city’s overall economic health. The mall that Ikea is moving into has long been considered one of the biggest failures of the area, as city leaders and the owners struggled to attract a tenant since its construction in 2016.

Officials were so desperate to fill it that, at one point, they briefly considered turning it into a homeless shelter.

The pandemic was yet another major setback for the neighborhood, as office tenants abandoned their leases and another major mall defaulted on its mortgage. But now, the city is cautiously optimistic that Ikea will attract a steady stream of foot traffic from people buying cheap furniture or just looking for an affordable lunch. Ikea executives called the area a “meeting place” and said it eventually will have co-working spaces available as well.

Local Maria Amunategui isn’t a fan of the meatballs but is delighted to have an Ikea closer to her home.

“I usually have to go to Emeryville, and it’s 23 minutes away,” she said. On Wednesday, she came to return something she bought at a different location, not expecting a wall of cheering employees, cameras and balloons. “It’s a surprise!” she added.

City officials have been desperate to get people back downtown, where office vacancy rates have remained stubbornly high since the pandemic. Breed recently passed a tax break to lure companies to sign new leases downtown, though it’s still too early to tell whether that will make a notable difference. Officials here are also trying to capitalize on the current frenzy of activity in the AI industry, with hopes that it could usher in another tech boom for San Francisco.

The mayor even went as far as to recently declare San Francisco the “AI capital of the world.”

At least for a day, the Ikea did lure more people to the neighborhood and improve the overall mood. After the mayor cut a giant purple ribbon that said “Ikea San Francisco,” employees greeted customers one at a time from a line that stretched to the end of the block. Shoppers danced into the store as Kool & the Gang’s “Celebration” blasted through speakers, many stopping to pull on complimentary Ikea T-shirts and blue bucket hats. Nearby, San Francisco Supervisor Matt Dorsey danced and waved a tiny Swedish flag.

San Francisco’s smaller Ikea is designed more for a city center than its larger suburban hubs, which can be triple the size. The new Ikea sells basics you can carry out but doesn’t stock bulkier items such as sofas, though it will let customers buy them for delivery. It has the usual showrooms made up to look like real city apartments, cramped layouts and all. There’s a Swedish food court with all of the Ikea classics, including meatballs and vegetable balls, lox, pickled things, and poached salmon. The company said it specifically added more vegetarian and sustainable options — things San Franciscans are known to enjoy.

Agnes Caballero “was just curious” about the new store and came to do a little reconnaissance Wednesday. Weaving between aisles of bedding accessories, she said she was looking for a cabinet for her house but would have to wait for her husband to buy anything because he had the measurements.

The store also has its own teams of security guards in place to handle potential shoplifting — a common problem for the area, which has long struggled with homelessness and visible drug use.

San Francisco’s mayor told reporters Wednesday that the “area has always been a tad bit of a challenge.” Breed added, “We hope that with a lot of the people who are in this area, that many of them are being offered chances to work for Ikea and other businesses.”

Nothing comes to this part of downtown these days without its host of challenges.

In 2011, San Francisco lured a number of tech companies — including X, formerly known as Twitter — to the rough patch of downtown in exchange for a tax break. The hope was that the companies and their well-paid employees would revitalize the area, as they spend their big paychecks at the cafes, restaurants and bars before and after work. But that dream never came to fruition, in part because the city didn’t anticipate the tech industry’s cushy culture of providing food and drink perks inside the offices.

Then a Whole Foods opened in 2022 with similar hopes of luring more foot traffic to the area. But it closed just a year later, after struggling with frequent shoplifting, drug use in and around the store, and at least one fatal overdose in the bathroom.

The hype around Ikea is counter to San Francisco’s mom-and-pop culture, which often chafes at any big corporate chains opening up shop. In many neighborhoods here, any corporation with multiple other locations worldwide must get special permission from City Hall to open. But downtown doesn’t have the same legislative hang-ups, which meant Ikea could open here without going through a gantlet of approvals.

On Wednesday, the first customers were welcomed by cheering employees wearing blue and yellow shirts that said “Hej!” Each person was handed one of Ikea’s signature blue bags filled with swag, including an Ikea bucket hat, shirt and watering can.

“I think it will bring more people downtown,” said Ruby Tsang, a recent San Francisco transplant who rents a studio apartment nearby. She plans to shop at the location for furniture for her small space and stop in at other times, too. “It’s great if I want to meet someone for coffee or lunch.”