Dunelm plans to remove approximately £100m from its cost base by FY29 and reinvest the savings in growth, as it sets out a three-year strategy to increase customer spending and accelerate sales.
The homewares retailer’s Winning Hearts & Homes plan combines digital development with investment in stores and a focus on encouraging customers to shop more frequently.
Dunelm is targeting annual sales growth in the mid-to-high single digits and an adjusted pre-tax profit margin of around 11 per cent. It plans to open up to ten stores a year, having identified approximately 100 potential locations.
The strategy follows annual results, showing the difference between revenue growth and profit performance. Sales increased 3.1 per cent to £1.83bn in the year to 27 June 2026, while profit before tax was unchanged at £211m.
Cash generation improved, however, with free cash flow rising to £154.8m from £127.4m. Digital channels accounted for 42 per cent of sales, compared with 40 per cent a year earlier.
Dunelm said trading had been softer during the opening six weeks of FY27 because of hot weather. The new strategy sets out how it intends to fund expansion while maintaining financial discipline.
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