Mixed fortunes as Dunelm enjoys record sales

Dunelm enjoyed report sales in the past financial year, although it had mixed fortunes on furniture sales.

Sales grew by 5.5% to a record £1.638bn but pre-tax profits fell 7.8% to £192.7m in the year to 1 July.

‘Our market share in furniture, where we have been building a stronger customer offer and operating model, was broadly flat [at 2%]. Sales across our furniture categories increased by 4% year-on-year, with a particularly strong performance in upholstery ranges being partly offset by lower sales in cabinet categories,’ says Nick Wilkinson, Dunelm ceo.

‘We are excited and ambitious about seizing the opportunity ahead of us to continue to grow sustainably. Throughout our history, we have had a strong track record of growing sales and market share, both in buoyant markets and in more challenging conditions. Since our IPO in 2006, our sales have increased by a compound annual growth rate of 10%, and in the past ten years more than 85% of this growth has been through market share gains. In the last year, despite consumers being under considerable pressure, we continued to grow our sales while the overall homewares market remained broadly flat, reflecting the gains we made in market share.

Whilst we are the homewares market leader, we still hold only a c7% share of the UK homewares and furniture market that is worth a total of £24bn. This significant market is highly fragmented, giving us the opportunity to serve many different product categories and multiple customer missions. Our most established categories have higher market shares, which we are confident of growing further still; at the same time we have an opportunity to increase our share in those more nascent categories where we are currently less well established.

‘We are developing and implementing our plans at a time when consumer interest in the home remains high despite cost-of-living pressures. Customers are seeking propositions that meet their ever-evolving emotional and functional needs. Multi-channel shopping is now fully established in homewares, and those businesses that have an effective total retail system with seamless integration between their online and store channels, as we do, have a clear advantage. We have a strategic plan which will enable us to capitalise on all of these themes and seize the opportunity for sustainable growth.’

Shareholders will receive a 27p a share dividend, making it 42p for the year: a 5% rise. Shareholders have received more than £1bn in the past decade.

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