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A third of Dunelm’s first-quarter sales online as it looks to make homewares shopping ‘as easy as possible’

A third of Dunelm’s sales took place online in the first quarter of its financial year, the retailer said in a third-quarter trading update today. The retailer is investing further in omnichannel retail as it looks to make homewares shopping as easy as possible. It says it feels well placed to manage the widely-reported supply chain disruption – and expects that full-year pre-tax profits will meet analyst expectations. 

Dunelm’s total sales came in at £388.8m in the 13 weeks to September 25. That’s 8.3% up on the same time last year, and 48% ahead of the same time in 2019. Digital sales accounted for 33% of sales – up by three percentage points on last year, and by 14 percentage points on 2019. First-half margins are expected to be flat or slightly positive compared to the same time last year, and the is predicting that full year pre-tax profits will be in line with analysts’ recently increased consensus expectations – of about £179m, in a range from £167m to £190m. 

Dunelm says the strong performance came largely in response to its summer sale, along with popular new furniture ranges and improved availability of its products  although the sale affects its gross margin for the quarter, which was down by 10 base percentage points on the same time last year. It also compared well with a relatively first quarter of 2020, when sales grew by 36.7% following store reopenings from the first lockdown. 

Its third-quarter performance, it says, shows “the strength of our integrated offer, proving customers with an attractive digital proposition, combined with local, friendly and convenient in-store shopping experiences.”

Nick Wilkinson, Dunelm chief executive, says: “We are pleased with our performance in the first quarter, with sales growth across all channels and continued market gains, especially given the strength of the comparative period last year, which benefited from pent-up demand following the first UK lockdown. 

“We continue to invest in enhancing our market leading proposition to win more customers who shop more frequently across Dunelm’s expanding range. For example, we have now developed a ’my favourites’ functionality online, which is another step in getting closer to our customers and making their homewares shopping as easy as possible. In the current environment, our purpose to help customers create the joy of truly feeling at home feels increasingly relevant and we are excited about our plans to become the first choice for home for more UK shoppers.” 

Supply chain 

The retailer, ranked Leading in RXUK Top500 research, says that within the wider context of supply chain disruption and freight and driver shortages, it continues to work with long-term suppliers and to mitigate the effect of these factors on its own business. It says it has good stock levels in its shops, warehouses and at its suppliers, while it sells relatively few seasonal products. 

“While we are not immune to the challenges being widely reported, we feel relatively well placed to manage them,” Dunelm says in today’s update. 

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