IKEA Canada has announced that it will close its urban-format store at Scarborough Town Centre (STC) in early 2026, less than three years after opening the location. The decision marks a significant adjustment to the company’s evolving urban retail strategy as it continues to respond to shifting consumer shopping behaviours, particularly the growing preference for online purchasing.
The IKEA Scarborough Town Centre closure represents the end of a short-lived chapter for the global retailer’s city-centre store experiment in Toronto’s east end. The location, which opened in August 2023, spans approximately 80,000 square feet and was designed to cater to the needs of urban residents through a smaller, more accessible store format.
Scarborough Town Centre was the second urban-format IKEA to open in Canada, following the company’s downtown Toronto location at Yonge and Gerrard, which launched in May 2022 and remains in operation. The Scarborough store was envisioned as a model for compact city retailing by offering convenience, local accessibility, and an omnichannel shopping experience that integrated in-store browsing with digital tools.
However, IKEA Canada said in a statement that the store’s performance had fallen short of expectations. “This decision has not been taken lightly,” said Selwyn Crittendon, CEO and Chief Sustainability Officer, IKEA Canada. “We are constantly renewing and improving our business in order to remain relevant in an ever-changing retail world and to secure our future as a leading omnichannel retailer for generations to come.”
Changing Consumer Habits and Omnichannel Growth
Crittendon pointed to the rapid evolution of consumer behaviour as a major factor behind the closure. Over the past several years, IKEA Canada has seen dramatic growth in online shopping, with 162.6 million visitors to IKEA.ca in the past year, compared to 33.8 million in-store visitors across the country.
The Scarborough store’s limited floor space restricted the number of products it could display and stock, which may have influenced its underperformance. Unlike IKEA’s traditional warehouse-style stores, which average more than 300,000 square feet, the STC location carried only about 2,500 products available for immediate purchase. Larger furniture items had to be ordered online or through delivery and pickup options, which may not have met all customer expectations, and a full-sized warehouse store is located a few kilometres away.
The Scarborough store’s digital-forward model, which included planning hubs, home delivery services, and click-and-collect features, aligned with IKEA’s long-term omnichannel vision. However, the company acknowledged that the balance between physical and digital retail continues to evolve and that the lessons from the IKEA Scarborough Town Centre closure will guide future decisions.
Impact on Employees and the Local Community
The Scarborough Town Centre location currently employs 130 workers. IKEA Canada emphasized that supporting its staff during this transition remains a top priority. “Even as we respond to market needs, we are committed to putting our people first and leading with our culture and values through this transition,” said Crittendon.
The company added that efforts will be made to minimize the impact of the closure by offering assistance and potential redeployment opportunities where possible.
Despite the closure, IKEA reaffirmed its commitment to the Scarborough community. Customers in the region will continue to have access to products and services through IKEA’s North York full-size store and various digital and physical touchpoints, including IKEA.ca, home delivery, click-and-collect services, and its network of plan-and-order points across the Greater Toronto Area.
Scarborough Town Centre’s Changing Retail Landscape
The closure also reflects broader shifts at Scarborough Town Centre, one of Toronto’s largest and most significant shopping malls. Managed by Oxford Properties, the 1.3 million-square-foot complex has faced a series of major tenant departures over the past two years.
In mid-2025, Hudson’s Bay Company closed its store at the mall, part of a nationwide wind-down following the department store’s liquidation process. Around the same time, French sporting goods retailer Decathlon shuttered its STC location, one of five closures in the Greater Toronto Area, as part of a strategic restructuring.
The exit of IKEA, a globally recognized brand, will leave another major vacancy at the property. For Oxford Properties, the mall’s owner, the challenge now lies in reimagining the large-format retail spaces once occupied by legacy anchors and large international brands.
Inside the Scarborough Town Centre IKEA
When it opened in August 2023, the IKEA STC store was celebrated as a milestone for accessible urban retailing. The grand opening attracted thousands of visitors, complete with community festivities and remarks from local officials.
Designed specifically for smaller-space living, the 80,000-square-foot store included both mall and exterior entrances, two checkout areas, and an assortment of more than 2,500 take-home products. Customers could view larger furniture pieces and order them for home delivery or pickup. The store also featured a Swedish Deli offering signature dishes such as meatballs, veggie dogs, and frozen yogurt, further enhancing the in-store experience.
The store’s design and amenities reflected IKEA’s focus on sustainability, with eco-friendly packaging, renewable energy initiatives, and services that encouraged waste reduction. Despite these efforts, traffic levels and conversion rates failed to meet internal projections.
Downtown Toronto Location Remains Operational
While the Scarborough Town Centre location prepares to close, IKEA’s downtown Toronto store at Yonge and Gerrard continues to perform strongly. Opened in May 2022, it marked the first urban-format IKEA store in Canada.
The downtown location, housed in the Aura tower, spans about 66,000 square feet over two levels. It has proven popular with downtown residents and students seeking affordable and space-efficient furnishings. The store operates on a cashless model, with self-checkout kiosks and mobile payment options, and integrates digital tools that streamline the urban shopping experience.
Its sustained success suggests that urban-format stores can work in certain markets, particularly those with high foot traffic, dense populations, and easy access to public transit. IKEA’s leadership has not indicated any plans to scale back operations at this location.
IKEA Canada’s Broader Retail Footprint
With the IKEA Scarborough Town Centre closure, IKEA Canada will continue to operate 15 locations nationwide. The retailer’s portfolio includes full-sized stores in major urban and suburban markets.
In recent years, IKEA has expanded its digital infrastructure and logistics network, introducing planning studios, pickup points, and enhanced delivery services to improve accessibility. These efforts align with the company’s commitment to sustainability, affordability, and convenience for Canadian consumers.
The company continues to adapt its physical footprint to the realities of e-commerce. Many of IKEA’s most successful markets now operate through a hybrid model that blends physical stores with an expanding network of online tools and delivery solutions.
This is an opportunity for Scarborough Town Centre to do what it should have done in the first place with this space: bring in Simons. Remember back in 2015 Simons was supposed to be opening at STC.
https://retail-insider.com/retail-insider/2015/06/simons-toronto/
I definitely remember this. Cross fingers!
I doubt this will happen now with the recent opening of the downtown store. It’s a shame that Ikea couldn’t expand the Scarborough Town Centre location now that Decathalon closed their store on the second level, and there is still a 3rd level from when Sears occupied the location.
shocked! to close this soon… they must of not brought the sales to pay rent… wow!
I sort of see this closing as a prelude to a suburban format Durham Region store.