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Dunelm reveals record profit despite tough outlook

by LLB Reporter
14th Sep 22 10:14 am

Looking in the rear-view mirror Dunelm can only see sunny skies as it reports another record profit. But a glance through the windshield reveals a massive consumer cloud about to break over the business.

Dunelm hasnโ€™t faced a heavy shower yet. Sales have remained โ€˜robustโ€™, albeit modestly lower year-on-year in the first 10 weeks since the year end on 2 July, and that is testament to the companyโ€™s skills as a retailer.

โ€œOver recent years Dunelm has been one of those names in the retail sector which has got the basics right. It has products people want to buy, at a price they want to pay, and it puts them in front of shoppers at the right times,” said AJ Bell’s Russ Mould.

โ€œIt has also steadily improved its online offering to take advantage of this channel โ€“ a significant boon during the pandemic.

โ€œFor now, the company is sticking with full-year forecasts. But even Dunelm canโ€™t change the economic weather and it seems likely sales will eventually suffer as people wait a bit longer to replace that duvet set or pair of curtains.

โ€œAs the retailer desperately tries to make โ€˜every pound countโ€™, to use the language of chief executive Nick Wilkinson, doing what it can to keep a lid on costs and offer customers value, there may be some confidence that it can emerge from the storm a stronger business.

โ€œLike other survivors in the retail space, Dunelm should benefit from market share gains as smaller and weaker rivals fall by the wayside.โ€

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