Finance
UK retailer Dunelm warns it has yet to see clear signs of sustained demand, shares drop
Published by Global Banking and Finance Review
Posted on September 9, 2025
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Published by Global Banking and Finance Review
Posted on September 9, 2025
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(Reuters) - British homeware retailer Dunelm cautioned on Tuesday that it has yet to see signs of sustained recovery in consumer demand, sending its shares down 7.3%, even as performance in its new fiscal year was off to a positive start.
Consumers remain cautious about spending in an environment of sticky inflation, slow rate cuts and shifting weather patterns that has created concern about price hikes and unemployment.
Dunelm, which sells items ranging from armchairs to kitchenware, said it was "pleased with early trading" of fiscal 2026.
Regular promotions and discounts have helped the retailer attract shoppers looking for cheaper deals, and the company is also investing in artificial intelligence-powered search to boost customer retention.
Dunelm has also been expanding its physical footprint, targeting opening of five to 10 more superstores in fiscal 2026.
"We've learned to navigate a volatile consumer environment," outgoing CEO Nick Wilkinson said in a statement. He will be succeeded by Sainsbury's executive Clodagh Moriarty at the beginning of October.
Jefferies analysts described the results as "solid enough," but said that the absence of signs of a consumer recovery could be a dampener in the near-term.
In August, several major British retailers wrote to finance minister Rachel Reeves warning that further tax increases in the upcoming budget, following April's rise in wages and employers' social security contributions, could hurt living standards.
Dunelm reported a pre-tax profit of 211 million pounds ($286.41 million) for the year ended June 28, up 2.7% from the prior year, and in line with analysts' consensus at the same level, according to a company-compiled poll.
The Leicester-headquartered company added it was confident of progressing toward its medium-term target of a 10% market share.
($1 = 0.7367 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Rashmi Aich and Frances Kerry)