Homewares retailer Dunelm has today reported a total sales rise of 15.4 per cent to £177.8 million in its third quarter, buoyed by ongoing expansion and the popularity of its winter sale.
In the 13 weeks to March 30th 2013, like-for-like (LFL) sales grew 5.2 per cent while the group opened three stores over the period and relocated an existing superstore, bringing store openings to the financial year to date to a total of 13.
Gross margin is estimated to have improved by around 20 basis points despite an investment to accelerate the clearance of discounted products, the group explained.
Dunelm‘s ‘Simply Value for Money‘ proposition is enticing cash-strapped shoppers to spend while its focus on premium end lines and the refurbishment of stores is helping to strengthen its position in the stunted market, analysts believe.
Joseph Robinson, Lead Consultant at analyst firm Conlumino, explained: “Dunelm‘s continued relentless outperformance of the wider UK homewares market is indicative of a retailer firing on all cylinders.
“A strong value proposition, supported by further space growth and underpinned by prudent financial managed, has paved the way for a robust growth story and impressive market share gains against the backdrop of subdued consumer demand.
“While threats are mounting at both ends of the market, Dunelm is well placed to continue to lead the way in a market suffering from persistent downwards pressure.
“Significant scope exists to expand its stores estate, as it works towards its aim of 200 nationwide superstores.
“Moreover, development of its range architecture and multichannel coverage is further adding to its appeal.
“The key challenge in the immediate term is to deliver against improving comparatives; while longer term hurdles will revolve around balancing a national footprint and operational efficiency. “
Dunelm‘s multichannel sales also saw a boost with the group reporting “pleasing revenue growth” in the category thanks to solid sales of its Spring/Summer catalogue and the retailer remains on track to open its web fulfilment centre later this Summer.
Commenting on the positive performance, Dunelm CEO Nick Wharton warned that a slowdown is the possible in the coming months.
“After a further period of solid trading and strategic progress, we now annualise our exceptionally strong comparative performance in the final quarter of last financial year,” he said.
“Accordingly, we anticipate that sales growth in like for like stores will become much harder to achieve in the remainder of the current financial year.
“With clear opportunities to strengthen further our customer offer in store, to roll out more new stores and to benefit from our exciting multi-channel agenda, the Board remains confident in the longer term growth prospects for the business.”
