For the year ending June 29, Dunelm reported a 4.8% growth in revenues which was driven by a 10.7% increase in like-for-likes to £1,100 million. While operating profits increased 8.3% to £545 million during the year. Homeware retailer Dunelm announced a sharp drop in sales in its final quarter as its online business saw success. Total sales were down 29% as like-for-like sales fell 50%. Ecommerce sales performed very strongly however, posting growth of 85% in the 16 weeks until June 27 as consumers stayed at home and shopped online.
The retailer closed all shops and its website in March 2020 but has now reopened all stores with only the in-store cafes remaining closed. The company said that investments made in its online platform had paid off in increased ecommerce sales. These investments included launching a dark store for click and collect and virtual consultations with customers.
“Dunelm ensured another year of consecutive revenue gains in 2019, to consolidate its leading position among home specialists. Breaking this growth down, the group successfully tapped into two major market trends: the rising demand for fashion-led ranges and growing online penetration (see Accessorising the Home – UK, March 2020). The retailer has also tapped into the broader home retail trend of evolving store propositions, as it unveiled its first ‘localised edit’ concept store in West Sussex in June 2020, aimed at compressing its larger store model into a high-street compatible format, with ranges handpicked by Dunelm’s experts and local focus groups.
Moving into 2020, however, this impressive run of year-on-year revenue growth is likely to be ended by the disruption of COVID-19. Even in home accessories, which as a predominantly smaller-ticket market are comparatively well-insulated from this; withheld and redirected spending is sure to hit sales. Further, despite ongoing growth in ecommerce, Dunelm has been particularly bold in its pursuit of physical expansion, as it remains loyal to its physical network, with plans, prior to the disruption, of opening some 3-5 new stores per year until it reaches its goal of 200 outlets in the UK. Accordingly, the retailer will have been particularly hard-hit by the closure of the majority of its stores from March until June.”