July 10 (Bloomberg) -- Ikea, the world’s largest home- furnishings retailer, is seeking a suitable site to open a second store in Beijing to meet rising demand as household spending increases in the world’s most populous nation.

The retailer is still drafting plans for the project and a final decision on the investment may be made in August, Linda Xu, public relations manager for Ikea China, said in a telephone interview late yesterday. The second Beijing store will likely be larger than the first, which covers about 42,000 square meters (452,084 square feet), she said.

“We typically build a store from the ground up, instead of leasing from an existing location,” according to Xu. “We’re now looking for a suitable location that will allow us to construct it this way.”

China is promoting local consumption to boost economic growth and counter a slump in exports after global demand worsened. Chinese retail sales rose 15 percent in May, the fastest pace in four months, government data showed.

The new Beijing store, should Ikea decide to proceed with the investment, will be its tenth in the country, Xu said. The retailer has seven stores in China, and is building one in the northern city of Shenyang and another in Shanghai, she said.

The current Beijing store is Ikea’s second-biggest in the world after its outlet in Stockholm.

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net

Last Updated: July 9, 2009 20:30 EDT