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Dunelm sees sales grow as shoppers buy more homewares online

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Dunelm continued to see strong sales growth throughout the first quarter of its financial year, as shoppers continue both to buy homewares – and to do so online. The retailer now plans to repay the government money it received as part of the coronavirus job retention scheme in its last financial year, as long as it continues to escape the effects of the pandemic. 

The homewares retailer, ranked Elite in RXUK Top500 research, today said it turned over £359.1m in the first quarter of its current financial year, a rise of 36.7% from £262.6m a year earlier. Well over a quarter (29.7%) of sales took place online in the 13 weeks to September 26 – up from 17.6% a year earlier.

NIck Wilkinson, chief executive of Dunelm, said: “We are really pleased with our very strong performance in the first quarter, with customers responding well to the Dunelm offer across all product categories, both in-store and online. 

“Recent months have seen homewares become even more relevant as people spend more time in their homes up and down the country. Our colleagues and suppliers are worked really hard to ensure our value-focused, market-leading proposition resonates with customers. The strength in trading at this early point in the year is testament to their exceptional commitment and adaptability. 

“While we remain cautious about the continued uncertainty in the wider market, the resilience and flexibility of our business models leaves us well positioned as we enter our peak trading period and we remain confident in our ability to grow market share and help even more customers create a home they love.”

Dunelm said that it had relocated two shops in the first quarter, both to renewable energy-powered, sustainable stores. It also continued to work on its digital website and platform, adding product recommendations and track my order functionality. Capacity has increased for both home delivery fulfilment and warehousing, put in place ahead of the peak trading season. 

Commenting, Georgina Sreeves, retail analyst at data and analytics company GlobalData, said Dunelm’s performance had been strong in the context of a weakening homewares market, set to contract by 9.5% this year.

She said: “Dunelm has made a comeback from its initial setback caused by the lockdown period, with total group sales growing a staggering 36.7% to £359.1m in Q1 2020/21 against a strong comparative the previous year. This significant uptick was supported by Dunelm’s continued investment in digital, and online sales now account for almost one-third (29.7%) of its total sales; an increase of 12.1 ppts on Q1 2019/20. Additionally, pent-up demand for physical shopping helped store sales grow 16.7%.

And she added: “With lockdown restrictions returning in areas across the UK, Dunelm will capitalise on the resurgence of consumers staying home and capture new customers as a result. It aptly introduced its ‘Home. We get it.’ campaign this month, featuring a stripped-back advert that resonates with the consumer experience of being at home which will increase its brand awareness and appeal as a low-cost homewares and furniture specialist.”

Dunelm was founded in 1979 as a market stall business and now trades online and from 173 shops, mostly out-of-town superstores. 

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