Ikea is spending €3 billion in the next year on new and existing stores around the world, with a large chunk of the cash going on turning its huge trademark out-of-town stores into e-commerce fulfilment centres.

The move by Ingka Group, which owns most of the Ikea stores worldwide,was revealed in an interview with Reuters, in which Tolga Oncu, retail manager at Ingka said the money would be spent in locations around the world, but confirmed news published earlier this year that around a third of the total(€1 billion) would be spent in London.

The UK capital is regarded as a “test-bed” for new Ikea store formats and logistics set-ups. Earlier this year, a new Ikea store was opened in Hammersmith, West London.

Although in recent years Ikea has revamped its website, rolled-out a new app and digital services, such as remote planning tools, Oncu told Reuters that Ikea needed to play “catch-up” at the back-end of its operation. “We have realised that by including stores in our last mile and fulfilment design network we can create a win-win situation,” said Oncu.

He added that shipping online purchases from the warehouse sections of nearby out-of-town stores will mean faster and cheaper deliveries with lower emissions, when compared to shipping from a few dedicated logistics centres.

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