Dunelm shrugs off damage caused by initial lockdown sales slump

GlobalData Retail 15 October 2020 (Last Updated October 15th, 2020 12:38)

Dunelm shrugs off damage caused by initial lockdown sales slump

Dunelm has made a comeback from its initial setback caused by the lockdown period with total group sales growing a staggering 36.7% to £359.1m in Q1 2020/21 against a strong comparative the previous year. The significant uptick was supported by Dunelm’s continued investment in digital, and online sales now account for almost one-third (29.7%) of its total sales; an increase of 12.1 ppts on Q1 2019/20. Additionally, pent-up demand for physical shopping helped store sales grow by 16.7%. In light of its strong performance, Dunelm intends to pay back the £14.5m it claimed on the Job Retention Scheme.

Dunelm’s performance is particularly commendable against a weak homeware market that will contract by 9.5% in 2020 as a result of financial uncertainty and reduced social gatherings. GlobalData expects the home specialist to remain the market leader in homeware this year, with its share set to grow 1.2ppts to 8.8%, far outpacing competitors such as IKEA, which will maintain a flat share of 5.4%. With £175.2m in net cash under its belt and increased home delivery fulfilment and warehousing capacity, Dunelm is well placed to navigate through the upcoming peak trading period and unpredictable Covid-19 headwinds.

With lockdown restrictions returning in areas across the UK, Dunelm will capitalise on the resurgence of consumers staying home and capture new customers as a result. It aptly introduced its ‘Home. We get it.’ campaign this month, featuring a stripped-back advert that resonates with the consumer experience of being at home, which will increase its brand awareness and appeal as a low-cost homeware and furniture specialist.