Dunelm is maintaining 70% of sales despite store closures

Despite its stores being closed, Dunelm has managed to maintain 70% of sales during the current lockdown.

The chain has been able to switch many shoppers to home delivery and click and collect, but is running at a ‘modest’ weekly loss.

In the half to 26 December it enjoyed a 23% jump in sales, which rose to £719.4m. Pre-tax profits jumped by 34.4% to £112.4m.

It has told shareholders that it will resume dividend payments, with an interim dividend of 12p.

‘The pandemic has accelerated the pace of change in consumer habits. These macro trends, coupled with the strategic levers we identified in our Customer 1st plan, mean we are becoming increasingly more relevant for more consumers. The events of the last year have created more “home lovers” and new needs for existing ones as the home continues to play an even more important role in all of our lives, fulfilling more functions than ever before. Additionally, we see that the impact of social distancing restrictions has turbo-charged the adoption of digital sales and fulfilment channels for both existing and new customers,’ says Nick Wilkinson, Dunelm ceo.

‘Another trend we have observed is the relative strength of footfall to out-of-town retail parks when compared to the high street. Most of our stores, and all of our in-store cafes, are out of town and sufficiently spacious to have enabled us to provide a safe shopping environment for all our colleagues and customers. We are also seeing increased engagement with our friendly digital content, growing interest in sustainability, and more support for local activities and community connections. We continue to respond to these changing habits, and with our Customer 1st plan accelerating our own transition, we are experiencing an intense period of innovation, capability building and learning across all areas of our business.

‘We are focused on improving our proposition, whilst at the same time actively preparing for when the lockdown restrictions are lifted, when we can welcome back our customers in store. We continue to develop and evolve our customer proposition at pace, especially where “digital” meets “local and friendly” in-store. We are now beginning to use our new customer data platform to scale customer relationship marketing activity, engaging with customers through both behavioural and lifecycle campaigns. We will grow our contactable base, continuing the strong momentum within our local community Facebook groups. We will introduce My Account services to offer order history, wish lists and stored details and are excited about the benefits this will deliver for frequent customers. 

‘We will continue to raise the bar in our core product offer as affordability and sustainability become even more important – offering customers value they can believe in. We will help our customers “live well” from home by introducing new desks and chairs, dinnerware and storage. We will build further scale into our furniture offer through the development of our sourcing capabilities, fulfilment capacity and improvements to the in-store selling experience.  We will grow our presence in adjacent categories including home decorating, outdoor living and make and mend crafting.

‘Following some disruption to our supply chain in the first half of the year, we expect to return to higher levels of stock availability during the second half of the year which will support a compelling re-opening offer in stores and a strong proposition online.

‘As we look forward to the return of unrestricted trading in the coming months, we will be welcoming customers back to our Pausa coffee shops (one of the few café offerings available in many retail parks and an important part of our store offer) and reintroducing our customer hosts, with better technology and tools to support in-store selling of products available for home delivery. We will be continuing to make improvements to our Click & Collect experience, developing services beyond “contact free” and “to car” with a wider assortment (including centrally fulfilled stock) and testing shorter lead times. We will step up our capacity for site experimentation and will improve site content to optimise the experience now that the foundational technology is fully in place.

‘We will also be improving our home delivery experience – shortening delivery lead times (including an assessment of ‘store to door’ pilots) and providing better order tracking (via a new carrier management micro-service). We will continue to increase the capacity of our supply chain to meet the high growth demands of the digital business. We doubled the capacity for one-man home delivery this winter peak and expect to grow this further whilst retaining maximum flexibility.’

DunelmSS21

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