Leading UK homewares retailer Dunelm has had a strong start to its 2026 financial year, with total sales up 6.2% YoY to £428 million, and gross margin up 80bps YoY. In its latest trading statement, it attributes the sales growth to both higher volumes and higher prices, with growth strong across all product categories. Good strategic progress was reported, with the launch of the Dunelm app, and the ‘Home of Colour’ brand campaign going live. Full-year outlook remains in line with the Board’s expectations.
Commenting on the results, CEO Clo Moriarty said that the performance reflects “real energy across the business” that is “driving improvements to our proposition”.
“With the reach of our national store footprint, a growing digital presence, and a growth mindset that brings together people and technology, I’m genuinely excited about what’s ahead,” she added.
Digital push for growth
The results for Q1 come hot on the heels of strong results for FY25. For the 52 weeks to 28 June 2025, Dunelm posted total sales of £1.77, up 3.8% year-on-year. Of this, digital sales accounted for 40%, up by 3% from 2024.
Indeed, digital is central to Dunelm’s growth strategy under new CEO Clo Moriarty, who took over the reins from outgoing CEO Nick Wilkinson on 1 October. Her background as chief retail and technology officer at Sainsbury’s lends itself to a digital-first approach, bringing expertise in customer experience and technology platforms to Dunelm’s next phase of growth.
The digital push is well underway, with online sales now accounting for around 40% of total revenue, and the launch of the mobile app to deliver a more integrated and inspirational shopping experience. The end goal is to complement Dunelm’s strong store network and create a seamless omnichannel journey for customers.
The company is also looking to broaden its market share by targeting younger, more tech-savvy customers. Its student promotions grew by 40% YoY, as the retailer capitalised on young people heading off to university by offering “everyday essentials at compelling prices.” Similarly, its “Home of Colour” campaign, run across digital platforms, social media, and video ads, is designed to appeal to younger, style-conscious consumers, strengthening the Dunelm brand around design and inspiration.
Alongside such campaigns, the company is leveraging technology to broaden its appeal and drive engagement. With ambitions to reach a 10% UK market share (it currently sits at 7.9%), Dunelm sees digital innovation as a critical lever for future growth.
The challenges ahead
Despite its strong start and ambitious digital strategy, Dunelm faces several headwinds. Inflation remains stubbornly above the Bank of England’s target, and although homeware has remained relatively strong despite squeezed household budgets, emerging as one of the best-performing non-essential retail categories, competition in the sector is intensifying. Dunhelm’s rivals are also investing heavily in omnichannel experiences and price-led promotions.
Additionally, the success of Dunelm’s digital initiatives hinges on seamless integration with its store network – a complex task that requires ongoing investment in technology and logistics. Any missteps could slow progress toward its 10% market share goal.
As Dunelm enters its next phase under Clo Moriarty’s leadership, all eyes will be on the retailer’s ability to balance innovation with operational discipline. With digital transformation at the heart of its strategy and a clear focus on younger, tech-savvy consumers, the coming year will test whether Dunelm can turn strong momentum into sustained market leadership.
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