Dunelm says strong online sales enabled it to limit its sales decline to 17% in the third quarter of its year, even though its shops were mostly shut. More than 90% of its sales took place online during that time, with fulfilment via both home delivery and click and collect from its stores. The homewares specialist says this shows the resilience of its multichannel model.
Dunelm, a Leading retailer in RXUK Top500 research, today reported sales of £236m in its third quarter, the 13 weeks to March 27. That’s down by 16.8% on the same time last year – despite its stores being closed for almost all of a period that started on December 27. On that date, 80 of its shops were shut in Covid-19 tier restrictions, but by January 5, all of its 174 shops were shut. In the first nine months of its current financial year, Dunelm’s sales reached £956m, 10% up on the same period last year.
Dunelm chief executive Nick Wilkinson says: “In a quarter when we were largely unable to open our stores, it has been very encouraging to see the strength of our digital channels which have enabled us to cover over 83% of sales from the same period last year. This resilient performance is testament to the commitment and dedication of our teams, who continue to adapt and innovate the Dunelm customer proposition.
"We are now looking forward to re-opening, with colleagues ready to welcome back customers through our doors. We have worked hard to rebuild inventory levels and our stores are well stocked across our extensive product range.
"The entire Dunelm team is excited to be able to offer our full proposition once again. With all stores soon to be fully open, combined with our ever improving digital offering, we look forward to helping our customers to create a little more joy in their homes and gardens this summer."
In the third-quarter alone, 92.4% of Dunelm’s sales took place online, with orders placed either from customers’ own devices or from tablets within its stores, when open. That’s up from 22.5% a year earlier. Some 35% of store sales in the previous year were covered through click and collect alone, with all of its stores except five in Northern Ireland permitted to offer the service. Click and collect was extended following the trial of a centrally-fulfilled model. This is now available in 160 of its 174 shops and means those stores can offer a wider range and availability. Its in-store tablet-based sales tool has been improved ahead of stores reopening.
Dunelm also introduced a deliver to car collection service, powered by JRNI (pictured), to 170 stores during the latest lockdown.
The retailer says customers have been satisfied by its service during the quarter, as demonstrated through a net promoter score of 83%. However, it says, it has underperformed a strong homewares market, given that other retailers selling in the category have been able to stay open, since they were classed as essential retailers.
Dunelm is now building its store inventory levels, despite “some minor disruption within our global supply chain” that is being felt across the retail sector, and says it will be well placed to serve customers once its store reopen. When stores do reopen, its newest store in Newcastle-under-Lyme will open, featuring a make and mend department as well as a larger home decorating one, while its Banbury store will reopen following refurbishment.
It says it is expecting a strong response to its reopening, but that there is still a range of possible financial outcomes for the year. As long as most of its stores are able to open as expected from April 12 and stay open, it expects to make full-year pre-tax profits ahead of the top of analyst expectations of £120m-125m.
Commenting, Georgina Sreeves, retail analyst at GlobalData, says: "Dunelm rolled out Click & Collect services to 160 stores during the quarter, allowing it to recover c.35% of store sales from the previous year. It should continue to offer this service once stores reopen for shoppers that favour convenience, and those still apprehensive about shopping instore. Dunelm’s online shoppers will also soon be able to create an account on the Dunelm website, allowing them to track orders and save favourites, which will further improve the online shopping experience.
Neil Shah, director of research at Edison Group, says: "Overall, the firm remains focussed on innovating and improving its customer proposition, as well as supporting its growth in home delivery and Click & Collect operations. With Dunelm also looking to invest and refit stores across the country in preparation for lockdown measure easing, it is well placed for a better end to the year, citing it expects to end ahead of the top range of analyst expectations.”