Out-of-town homewares retailer Dunelm Group announced today that it is still planning for growth despite tough trading conditions in the UK.
In an interim management statement for its third quarter, the company revealed that like-for-like sales fell 1.3 per cent year-on-year in the 13 weeks to April 2nd, as relatively flat sales attributed to the late Easter were largely offset by favorable weather in January.
Dunelm reported total year-on-year sales growth of 9.4 per cent for the quarter, down on the 12.8 per cent growth experienced one year before, but total sales values were up £11.9 million to £139 million.
More stores are in the pipeline with the company contractually committed to ten new outlets, although the majority of these will open in the next financial year.
Two new superstores were opened during Q3, in Scarborough and Truro, each of which have started trading strongly according to today’s statement.
Nick Wharton, the former Halfords Finance Director who became Dunelm CEO in February, said he was pleased to see that the retailer was still growing despite such difficult economic circumstances.
“Against strong prior year comparatives and difficult trading conditions, it is pleasing to see the continued growth of our business through new stores and a further strengthening of our market position through share gains,” he explained.
“We have maintained our disciplined approach to the management of gross margin and operating costs.
“Looking forward, although we expect the consumer environment to remain very challenging, we are confident of delivering further growth thanks to the strength of our proposition, the launch of new and refitted stores and our multichannel developments.”
Today’s statement also indicated that gross margin increased by approximately 150 basis points compared with Q3 of the 2009/10 financial year, reflecting the pass-through of cost price increases experienced during the year-to-date.
However, in a warning similar to that made by JD Sports Executive Chairman Peter Cowgill yesterday, Dunelm said that cost price pressures are likely to continue in the coming months, meaning strong increases in gross margins are unlikely to be maintained.