Coronavirus

Dunelm sales down despite online boom

Dunelm has revealed its total sales were down by 28.6% in its fourth quarter of trading

In the quarter ended 27 June, store like-for-like sales plummeted by 49.7% following estate-wide closures, though online business soared by 85.2%. 

While sales crashed by 78% in April and 48% in May, the group did return to profitability in June, with total sales up by 20%. 

It comes as the group said that its digital fulfilment channels were operating at “record volume levels” in its final quarter as more shoppers turned to online purchases. 

Its home delivery fulfilment “exceeded previous record levels” in every week since April, and its supplier partners quadrupled their ‘direct to customer’ fulfilment capacities following the crisis.

Nonetheless, this increased demand has meant that online availability, delivery lead times and service levels have “been under pressure” across the group. The group did however note it benefitted from investments into its digital platform, which helped enable the “significant” online growth. 

In its latest trading update, the group said it now expects a full-year profit before tax of between £105m and £110m, against profits of £125.9m reported the year prior. 

The group said it will maintain a “cautious” outlook regarding the effects of Covid, and in addition to “demand uncertainty”, it expects its full-year results to be impacted by cost headwinds directly related to the impact of the virus. 

In addition, it notes that social distancing measures across stores and distribution have led to higher costs to operate for the short-term; in total, estimating these costs to be around £150,000 per week.

Nick Wilkinson, CEO of Dunelm, said: “We are incredibly proud of how our team and committed supplier partners have responded during the pandemic and of what we have achieved together. 

“Our colleagues have demonstrated exceptional commitment, agility and resilience to adapt our proposition and operations and I would personally like to thank them all.”

He added: “The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business. 

“This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers. There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.”

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