Dunelm achieves profitability through e-commerce

Friday, April 13, 2012 - 11:12 by Graham Miller

Dunelm has become the latest in a long line of high street chains to pull itself back into profit-making territory, thanks to the increasing power of safe shopping online.

The January sales helped to bolster its bricks and mortar performance at the beginning of the year, but it was unable to prevent a general drop in revenue being registered on the high street during the first quarter of 2012.

This has been offset, as is often the case, by the rising interest in its e-commerce outlet, which helped Dunelm to increase its profit margin to 0.3 per cent.

Until recently, the out of town superstores from which Dunelm was able to develop its brand and appeal to consumers, were a key asset. However, rising fuel prices and the problems associated with actual shortages of petrol have caused many consumers to stick to the shops in town centres, rather than venturing further afield.

Luckily for Dunelm, its online presence was sufficient to take up the slack, with many loyal customers leaving the car on the drive and using the web to shop with their favourite homeware retailer.

Dunelm currently operates 120 bricks and mortar outlets across the UK, of which just nine can be found in the centre of towns and cities. Despite the drawbacks now associated with high street retail, Dunelm has announced ambitious plans to open another 80 shops in Britain, which will make it a major force, both online and off.

The news that any retailer is succeeding thanks to its multichannel approach must be welcomed by consumers and those in the industry alike.

If e-commerce and the high street can operate in unison rather than being seen as opponents to one another, then everyone can benefit from improved service and lower prices.