Glass cases house beautifully displayed arm-candy at the latest new entry on a reviving Oxford Street in central London.

This is not a designer handbag purveyor but a store dedicated to Ikea’s signature bright blue Frakta carrier bag – a pop-up shop paving the way for the home furnishing retailer’s delayed move into a larger store on-site, which is due to open next year.

Filled with quirky social-media-friendly gimmicks including a service button to call up blue candy floss from a curtained window and a blue mirrored room intended to mimic entering a Frakta bag, the small shop has opened after construction issues prompted delays to the main store. Ikea had originally hoped to open the larger store last autumn, but building work was delayed by problems including water leaking into the basement.

Peter Jelkeby, the boss of Ikea’s UK arm, says he is confident the larger store will open in the spring.

“If you went in now, you would see walkways and walls are up – the foundations are there,” he says of the 5,000 sq ft store, which will take up the ground floor and basement of the former Topshop site by Oxford Circus. The upper floors will become offices.

“It is a massive project to put this store together and we are where we are with time lines but it is quite clear we will open in the spring,” he said. “This is a step towards the bigger store.”

View image in fullscreen

He said Oxford Street was part of Ikea’s plans to become more accessible and that it was looking to open further high street locations – a site in Hammersmith in west London launched in 2022. The group plans to open a further site, part of a shopping centre in Brighton, next summer. He said Ikea was committed to the UK market and there was “more to come” on store openings and online services.

Jelkeby said Ikea was “investing a lot in affordability” – trying to keep prices down during the cost of living crisis – and said he did not believe Rachel Reeves’s October budget would lead to higher prices at the retailer.

Get set for the working day – we'll point you to all the business news and analysis you need every morning

after newsletter promotion

He said the rise in legal minimum wage and national insurance payments, as well as planned business rate rises, were placing a “cumulative burden” on business and he said he wanted “a dialogue” over the future of business rates.

However, Jelkeby said that as a business accredited to the independent living wage, Ikea recognised the benefits of paying workers well and he hoped the increase in the legal minimum wage might ultimately help the business.

“We hope that it will be better for the many and that will benefit retail longer term,” he said.

Matt Gould, the 26-year-old manager of the Oxford Street store and Ikea’s other London high street store in Hammersmith, said the idea of the pop-up Frakta store – which is open until March – was to “create an experience, not financial benefit”.

He said the brand wanted to create excitement ahead of the opening of the larger store, which will have a cafe alongside room sets displaying larger items that can be ordered for home delivery and a “market hall” area with a range of more than 3,000 items that shoppers could immediately take home.

He said there would also be a new “experiential space” with “pockets of surprises with digital and community-based interaction”.

“It has to be fun. On the high street at the moment, it is ever more important to create a space that is exciting and people do want to come back again.”