Furniture company IKEA is looking at setting up shop in New Zealand.

It's conducting market research with a local retail consulting firm.

Retail NZ spokesman Greg Harford told Chris Lynch it's not surprising they're looking here because our economy is relatively good compared to other markets.

But he says the company could struggle to find the right space to accommodate its needs.

"Typically overseas they have enormous sites, their shops are really, really big, they have enormous traffic impacts and there's no sites that have been identified previously in New Zealand that would simply be big enough to cater for them."

LISTEN TO GREG HARFORD WITH CHRIS LYNCH ABOVE