Home furnishings retailer Dunelm recently reported a growth in sales and profit in what has been another strong year for the business. According to its preliminary results for the 52 weeks to 29 June 2024, total sales rose 4.1% to £1.7bn from £1.6bn in 2023. Pre-tax profit resulted at £205m, up 6.6% from £193m against the previous year.
As well as a strong financial performance, Dunelm has delivered positive outcomes across its broad group of key stakeholders. “We strive to make good decisions and ensure what we do is increasingly sustainable,” Nick Wilkinson, Chief Executive Officer, said. “During the year we reiterated our good and circular approach to sustainable growth, and continue to ensure it is embedded into our strategy and ways of working so that we are delivering for all of our stakeholders and focussing on our planet, communities and people.
“In FY24 we were proud to become the first homewares specialist to have validated SBTi targets across Scope 1,2 and 3 carbon emissions, which sees us align to the latest climate science from the Intergovernmental Panel on Climate Change (IPCC). We have also made further progress in extending our good and circular approach into our customer proposition, increasing the proportion of own-brand products which have our more sustainable ‘Conscious Choice’ label, and introducing the ‘Too Good to Go’ initiative to our Pausa cafes to help reduce food waste.”
Dunelm’s committed supplier partners are also helping the retailer to limit its impact on the planet. “Having grown together over several decades, we see these enduring relationships as a key strength of our unique operating model,” Nick continued. “On sustainability matters, we work together with our suppliers and continue to learn. Where necessary, we have been encouraging suppliers to adopt a data monitoring standard and action planning tool (the Higg Index) to underpin their improved manufacturing programmes.”
Dunelm says it is continuing to place importance on and build momentum in the work its stores and sites do in their local communities too. Originating during the pandemic and expanding since, all Dunelm stores now support important local organisations including selected schools, care homes, women’s refuges and more.
“Our annual Delivering Joy campaign is an example of this work in practice,” Nick said. “Last year, I am immensely proud to say that we delivered 125,000 gifts to these local causes. Communities also form the backbone of some of our circularity initiatives, including our expanding takeback schemes and ‘Home to Home’, through which customers can donate pre-loved homewares items to those in need.”
Dunelm also places great importance on the development and engagement of its committed colleagues. Developing talent improves retention, enables internal succession, and increases productivity and business resilience. Nick added: “Encouragingly, we saw colleague retention increase to 89% during the year (FY23: 87%). Whilst our colleague engagement score fell in FY24, although high by industry standards, we are actively listening to our colleagues. We see very strong response rates to our colleague engagement surveys throughout the year, which give us detailed and extensive feedback, from which we are building positive action plans across the business.
“As technology changes the nature of all roles across our business, we are as committed to lifetime learning as we are to early careers recruitment and development. Our data academy and apprenticeships are good examples of this. We are also excited about our ‘Reach’ development programme which launched during the year and is focused on increasing the number of ethnically diverse colleagues in senior positions. We have much more to do in this area but are encouraged that the proportion of our ‘role model’ leaders from ethnically diverse backgrounds increased to 5.8% in FY24 (FY23: 3.8%).”
Looking forward, Dunelm has three broad focus areas which frame its priorities and investments. These are an evolution of its strategy, and in combination will allow the retailer to achieve its full potential as the Home of Homes, and to be the UK’s most trusted and valuable brand for homewares and furniture.
Nick explained: “Firstly, in the area of product: we see opportunity to redouble our focus on product development, increasing our curated ranges, bolder design differentiation, enhancing cross-category coordination in our collections and innovation in sustainable materials. In recent times we have been acutely aware of the importance in having the right product offer, at the right time, to ensure we remain relevant and appealing to customers. In the year we saw this demonstrated with stronger upholstered furniture collections, combined with 5-day delivery lead-times.
“Secondly, we are building further confidence in opening more stores and developing our digital channels to deliver an outstanding and connected multi-channel shopping experience for our customers. We know that multi-channel shopping is the preference for most when it comes to homewares and furniture, so joining up our channels as much as possible is a priority.
“Thirdly, after building up our skills and operational capabilities in recent years, we see significant opportunity to harness them to achieve both productivity improvements and further strengthen our customer offer. In light of elevated wage inflation, and with growing technology and data capabilities, where foundational investment has been made over recent years, there are increasing opportunities to introduce more automation and productivity tools throughout the business. These are already driving efficiencies in parts of our operations (such as reducing volumes in the Customer Contact Centre) and our capacity to successfully implement more of these initiatives will increase going forward.”
