IKEA Raises Pay to $29, Pressures NZ Retailers to Match

Swedish furniture giant IKEA is shaking up New Zealand's retail landscape by paying workers significantly more than most local competitors.

The company announced it's hiring 85 additional staff for its Auckland store, bringing its total New Zealand workforce to 561. Entry level workers now earn $29 per hour, rising to $31 as they advance, alongside perks like five weeks of leave, 75% off commuting costs, and subsidized meals.

"We're proud to be growing our team while staying true to our values," said Lauren Clegg, IKEA's New Zealand people and culture manager. The expansion includes new evening shifts for stock replenishment and food services roles.

The living wage in New Zealand currently sits at $27.80 per hour. IKEA's rates put them ahead of that benchmark and significantly above many established retailers.

Workers First Union retail secretary Rudd Hughes says the gap between international newcomers and local chains is striking. Costco and Kmart also pay living wages or better, while major New Zealand and Australian brands like Woolworths, Foodstuffs, Briscoes, and Warehouse lag behind.

"Kiwi businesses really need to step up to the market and pay their workers what they need to actually live in society," Hughes said. The union plans to begin collective bargaining with IKEA next week, using the company's current offer as a starting point.

The Ripple Effect

IKEA's approach is already changing the conversation around retail compensation across New Zealand. The union now uses companies like IKEA as benchmarks when negotiating with other employers, creating upward pressure on wages industry wide.

Hughes praised IKEA's willingness to work with unions before the store even opened, a practice he says isn't common among retailers. That collaborative approach, combined with competitive pay, sets a new standard for how international companies can enter the market.

The impact extends beyond just wages. With New Zealand's large retail workforce, better compensation means more workers can fully participate in their communities without constant financial stress.

IKEA's investment proves that paying well and treating workers fairly can coexist with business growth in a competitive market.