Ikea stumps up £31.5 million as it looks to make UK fulfilment more efficient and reduce packaging waste
Ikea UK is investing £31.5 million across its Peterborough and Doncaster customer distribution centres (CDC) as the retailer aims 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%, 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.
The investments will strengthen Ikea’s UK fulfilment network as online sales account for 43.3% of total UK sales in financial year 2026. It 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, it 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% and void fill by up to 60%.
The technology is expected to increase the share of parcels processed through automation at the Peterborough CDC from 47% today to 75% 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 meet customer demand.
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 annually. The new capability has created an additional 80 jobs at the Doncaster site.
David McCabe, CEO and CSO at Ikea UK&IE, says: “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 CDCs 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.”
2026 RTIH Innovation Awards
Online delivery will be a key focus area at the 2026 RTIH Innovation Awards.
The awards, which celebrate global retail technology innovation in a fast moving omnichannel world, have now closed for entries. Our winners will be revealed at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London on Wednesday, 4th November.
Check out our 2026 shortlists and finalists here.
We received a record number of entries this year and many fantastic examples of technology excellence driving transformative change across the global retail sector.
Congratulations to all those who made it through the initial submission process! It’s now over to our star studded judging panel who will decide the winners to be announced at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London.
The event will be held on Wednesday, 4th November and consist of a drinks reception, three course meal, awards ceremony presided over by award winning stand-up comedian, presenter, actor and broadcaster, Aurie Styla, and after party until 1am.
Click here to book your place at the 2026 RTIH Innovation Awards Ceremony on Wednesday, 4th November.
