Sales soar at Dunelm but retailer warns on consumer outlook

Leicester homewares retailer Dunelm saw its sales increase to £835m during the second half of 2022 – but has warned investors that consumer outlook remains “unpredictable.”

Posting a relatively solid set of results, the firm said the 5% increase meant total sales were 43% higher than they were in 2020 prior to the pandemic.

Dunelm’s pre-tax profits were down, slipping from £140.8m to £117.4m, but this simply reflected “the impact of sale timing, strong post-pandemic demand in the prior year, and inflationary impacts.” The company told the London Stock Exchange it had fully expected to post the decrease.

Highlights during the period included three new store openings, including one relocation, and the investment of £17m in digitalisation, capability and capacity to support future growth.

The firm said its expectations for the current year remain unchanged due to the “resilience” of its customers, but erred on the side of caution in terms of forecasting the longer-term picture.

Dunelm CEO Nick Wilkinson said: “We are all learning to live in a new, complex and rapidly evolving economic reality. Recognising this, our focus has been on ensuring that we continue to offer outstanding value to our savvy customers through a proposition which is committed to quality, at the right price, across an expanding range of relevant products. We believe that this is why we have continued to grow our sales, customer numbers and market share.

“In this environment, agility, creativity and innovation are more important than ever and we have endeavoured to make every pound count, both for ourselves and for our customers, helping to mitigate the impact of inflation. While we do this, it is important that we also maintain our long-term thinking, invest for sustainable growth and continue to ensure we are in a position to seize the significant opportunities ahead of us.”

Wilkinson added: “Much like during the pandemic, our customers, colleagues and the communities we operate in will remember how businesses behaved when times were tough, and we are confident that our approach of offering outstanding value and choice for all will enable us to – once again – emerge from this challenging period stronger than ever.”