Dunelm says a focus on value has helped it to trade through a challenging environment in the first quarter of its financial year.
The homewares retailer today reports sales of £357m in the 13 weeks to October 1 2022 in a first quarter trading update. That’s 8% down on the same time last year, but 36% ahead of the same time three years ago – before the Covid-19 pandemic. Dunelm trades in a market category that has been harder hit by rising inflation, however it says demand has been strong for products that help shoppers to stay warm as energy bills rise.
A third of sales took place online, through digital channels including home delivery, click and collect and online sales via in-store tablets. That’s in line with a year earlier, but two percentage points lower than in the second half of Dunelm’s last financial year. In Dunelm’s last financial year, a third of sales were online in the first half of the year, before rising to 36% in the second half. Digital sales were also 14 percentage points (pp) ahead of the same period in 2019.
The retailer, ranked Leading in RXUK Top500 research, says it is seeing strong demand for seasonal products such as its ‘winter warm’ range. It also says it is focusing on keeping operations tight and says it expects to deliver a full-year 50% profit margin, in line with previous guidance.
Nick Wilkinson, chief executive of Dunelm, says: “Dunelm has emerged from the last two years as a bigger, better business, with total sales up 36% against the same period pre-Covid. We have benefitted from the commitment, expertise and adaptability of our colleagues and supplier partners – the same qualities that are serving the business as we navigate the current inflationary challenges.
“As we enter what will clearly be a challenging winter for consumers, our absolute focus remains on making every pound count for everyone, through a tight grip on operations. We will continue to offer outstanding value at all price points, so our customers can make their own choices around adapting to the economic backdrop. This focus on value has seen Dunelm successfully navigate previous periods of economic uncertainty. The landscape is a demanding one, but we feel both energised and confident in our ability to grow market share as the first choice for UK homelovers.”
Dunelm, founded as a market stall in 1997, now sells online and from 177 shops, mostly out of town superstores.