Retailer sustains growth despite customers facing ‘increasing pressures’

Homewares retailer Dunelm has continued to grow market share as it revealed a strong quarter for sales.

Sales for the third quarter reached £399m, up 69% on a year earlier and 40% up on two years earlier, a period that was only slightly affected by the start of the pandemic.

Dunelm’s digital revenues for the quarter are more than double that seen two years ago, generating £140m. Online accounted for 35% of the £399m sales, compared with 23% of £285m.

Dunelm’s chief executive Nick Wilkinson said: “It has been another good quarter for Dunelm with sustained growth across all of our homewares categories, particularly as customers ready their homes and gardens for the summer.

“Performance has been strong across all channels and our new facilities for e-commerce and furniture fulfilment are now fully operational, which will enhance our multi-channel proposition, whilst providing the capacity for further growth.”

The retailer has deliberately increased the amount of stock it is holding, to mitigate against ongoing supply chain disruption.

At Dunelm’s year-to-date runrate of £30m per week versus £22m per week in 2020, it is holding about one week’s worth of extra stock. As a result, it expects to have more costs for stcokholding in the second half of the year.

Wilkinson is mindful of “significant headwinds and increasing pressures on the consumer” but remains confident of Dunelm’s performance.

“The resilience of the Dunelm business model and the ability of our colleagues to adapt quickly to changing circumstances give us confidence in our plans and we remain well placed to continue to grow market share,” he said.