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Dunelm enjoys strong summer

DunelmAW19Dunelm has enjoyed a strong sales performance over the summer, helped by a significant increase in furniture sales.

The 173 store chain said sales in July rose by 59% and by 24% in August.

In the eight months prior to lock down and once stores re-opened it saw furniture sales increase by more than 40%.

‘For the eight months to February 2020, as a result of the progress and investments we had made in digital, product, customer and operational initiatives, we were on track to deliver a year of very strong performance. Total sales were up by 6.8%, with online (home delivery) growth over 30%; gross margin was up by 120 bps; and unique active customers had increased by 8.8% on a 12-month rolling basis to February,’ says Nick Wilkinson, Dunelm ceo.  

‘The full year results [to 27 June] reflect the disruption in the final four months of the year, including the impact of the forced store closures and new social distancing measures. Total sales declined by 3.9% to £1,057.9m, unique active customers grew by 1.3%, gross margin increased by 70 bps, and pre-tax profits of £109.1m was £16.8m lower than the prior year.  

‘Our new digital platform enabled us to respond to the surge in online demand when stores were closed, with online (home delivery) sales growing by over 100% in the final quarter and by 50.5% for the full year. Digital sales as a percentage of total sales reached 27% for the full year (FY19: 19.6%).

‘For the first eight months of the year, we delivered growth across all core homewares categories. The performance of the furniture category was particularly strong, with sales growth of over 40%, both before the Covid-19 disruption, and during the last weeks of the year when the full range of furniture was once again made available in stores and for two-man delivery.

‘During the lockdown period and since our stores have re-opened, customers have continued to buy into categories across homewares and furniture, with home office furniture, dining furniture, lighting and wallpaper performing particularly well.

‘Since re-opening, we have observed both a higher level of conversion and a higher basket size in store.  Conversely, whilst conversion on our website has also increased, the average order value online has decreased as customers have broadened the range of categories that they are willing to shop online for, moving the mix away from higher value furniture items.’

Since re-opening stores social distancing measures are costing it about £125,000 a week in extra costs. It stopped claiming furlough funds when stores re-opened and it will not claim the job retention scheme bonus.