IKEA invests £31.5 million to make UK fulfilment more efficient and reduce packaging waste

IKEA is investing £31.5 million across its Peterborough and Doncaster Customer Distribution Centres (CDC) to make online fulfilment more efficient and sustainable.In Peterborough, new technology is packaging customer orders to size and reducing material usage by up to 30 percent, by preventing waste from oversized boxes and filling paper. In Doncaster, IKEA is trialling a new regional fulfilment capability, serving customers in the north and Scotland from a closer location to them.

Together, the investments will strengthen IKEA’s UK fulfilment network as more customers choose to shop online, with online sales accounting for almost half (43.3 percent) of IKEA’s total UK sales in financial year 2026.

Technology upgrades transform Peterborough CDC

IKEA is investing £30 million in new technology for its Peterborough CDC, with the upgrades taking place over a two-year period.

As part of this investment, IKEA has launched new PackSize technology to prevent waste from oversized cardboard boxes and filling materials by packaging customer orders to size. On average, the technology reduces material usage by up to 30 percent and void fill by up to 60 percent.

The technology is expected to increase the share of parcels processed through automation at the Peterborough CDC from around half (47 percent) today to three-quarters (75 percent) in 2027, helping the fulfilment team prepare orders for delivery more efficiently. These additional orders would otherwise have been packaged by manually creating a packing carton which includes having to measure the article then creating the cartons to fit the order.

Three drones and nests were introduced at the site in January to support inventory management. They scan each aisle in short cycles, helping IKEA to keep stock in the right place and consistently meet customer demand.

The technology upgrades are enabling IKEA’s fulfilment team to work more efficiently and will not impact staffing levels at the centre

Doncaster CDC brings fulfilment closer to customers

IKEA is investing £1.5 million in trialling a new fulfilment capability at its Doncaster CDC. The site now fulfils orders for customers in the Gateshead, Edinburgh and Glasgow areas, with plans for Sheffield to follow.

By fulfilling these orders from Doncaster rather than Peterborough, IKEA expects to reduce emissions from delivery journeys by an estimated 280 tonnes of CO2 annually¹.

The new capability has created an additional 80 jobs at the Doncaster site.

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.

These investments in our Peterborough and Doncaster Customer Distribution Centres will ensure fulfilment is smoother than ever and reduce our environmental footprint – while positioning the business for long-term success by strengthening operational efficiency and supporting sustainable growth.

Our wonderful teams of co-workers in Peterborough and Doncaster work tirelessly getting orders to our customers, and we couldn’t function without them. We’re empowering our people to get the best out of these new technologies, and we’re excited to watch them grow alongside the business.”

¹In financial year 2027 (September 2026 – August 2027), IKEA expects to deliver 2,361 lorryloads to Scotland and Northern England from its Doncaster CDC that would otherwise have been delivered from its Peterborough CDC. On average, delivering from Doncaster saves 90 miles per trip, totalling 212,000 miles annually. As every 1,000 miles travelled in a lorry generates 1.325 tonnes of CO2, IKEA expects to reduce emissions by 280 tonnes over the year.