Dunelm prepares to open first London stores as sales and profit rise
London-listed homeware retailer Dunelm has seen its sales tick up despite its customers facing “competing demands” for their disposable income.
The Leicester-headquartered firm saw its overall revenue climb to £1.7bn in the 12 months to 29 June 2024, up from £1.64bn the previous year—growth of 4.1 per cent.
This increase was largely driven by 6.2 per cent in the volume of goods sold and an expansion of its digital footprint.
Online sales accounted for 37 per cent of total revenue, up from 36 per cent in the prior year.
Dunelm also reported a strong gross margin of 51.8 per cent, up from 50.1 per cent in the previous year, driven by favourable freight conditions and “improved operational efficiency”.
As a result, the retailer’s pre-tax profit rose by 6.6 per cent to £205m, compared to £193m in the previous financial year.
Nick Wilkinson, CEO, said: “This strong set of results is testament to the hard work of our adaptable and committed colleagues.
“In a period when consumers faced inflationary pressures and competing demands for their disposable income, we have continued to raise the bar on the relevance and value we offer at Dunelm.
“The continued delivery of volume-driven sales growth and further share gains in this softer market underlines this, and the strength and resilience of our business model.
“We have made good progress with our growth plans, including the expansion of our store estate, building a faster and better digital experience for customers, and advancing our tech and data capabilities.
“As we evolve our strategic thinking in this changing environment, we are now even clearer on the areas which will help us to unlock our full potential as The Home of Homes.
“Whilst we are gradually seeing improvements to economic indicators, we are yet to see a meaningful change in consumer spending habits in our markets.
“Against this backdrop, and compared to a strong first quarter last year, we have made a solid start to FY25.
Our plans give us a clear pathway to reaching our next milestone of 10 per cent market share in the medium term, and we remain very confident in our ability to deliver long-term sustainable growth as a result.”
Dunelm plots London expansion
Earlier this year Dunelm revealed it was planning to open its first London stores after seeing strong sales growth in the capital in the second half of 2023.
Despite boasting 183 shops UK-wide the retailer doesn’t have any in the inner boroughs of London – a fact Wilkinson said he was keen to change.
He said: “We have stores around the North and South Circular but none in the London Boroughs.
“If you’d asked me five years ago I’d say Londoners would just buy online, but my view of this has changed.
“Now I think that unless you’ve got a store in a specific community then you’re not really there, because those physical sites are where people become aware of the brand and realise we’re a well-established retailer.”
Although Dunelm is yet to reveal exactly where the new stores will be located, Wilkinson said Londoners could expect to see the first opening “before Christmas”.
He added that while the shops will stock the same lines as others around the UK that the offering would be “heavily edited” due to space restrictions.
He said: “These stores won’t have car parks because a lot of people in London don’t even have cars, so we won’t be stocking larger furniture items.
“In terms of what the range will look like, it’s going to be an experiment. We’ll be seeing how low we can go with the edit while maintaining that same breadth of value and style.”