Dunelm posts ‘solid’ sales growth in challenging conditions

Dunelm achieved sales growth of 1.6% in the third quarter to December 28. In the first half of its financial year, the retailer’s sales rose 2.4% to £894m and it believed it had increased market share as it focused on strategic priorities such as elevating the product offer.

The retailer struck a cautious tone on prospects, partly because of increased cost pressures following the Budget last autumn, but “still expects” profit expectations to be met.

Dunelm chief executive Nick Wilkinson said: “We’re pleased with our performance in the first half. We are growing sales and volume, with customers again responding well to the value and choice we offer across our ranges. 

“At the same time, we’ve made significant strategic progress across multiple initiatives which are helping us to improve our attractive, specialist offer and continue to gain market share. We have taken our first steps outside the UK with the acquisition of 13 stores in Ireland, opened our first inner London store in Westfield, and made further improvements to our online customer experience which is contributing to continued strong digital growth.

“As we move into the second half, we have successfully launched our winter Sale which is being well received by customers seeking amazing value across a wide choice of relevant products for the colder months. As we navigate this challenging environment, we see even more opportunities to harness our unique business model, raise the bar on our proposition and fulfil our ambitions.”

The recent Budget, which brought punishing cost increases for retail, has caused alarm across retail. Dunelm said: “We are mindful of the impact of the Autumn Budget announcement on our business, suppliers and customers.

”As a large employer, with over 11,500 colleagues, we have previously highlighted the impact of ongoing wage inflation. Whilst the increase in the national living wage was largely anticipated, the increase in employer national insurance contributions is an additional cost headwind. Initiatives to drive productivity across the business are underway, and as these initiatives mature, we anticipate mitigating the upward pressure on costs over the medium term.”