The home furnishings retailer Dunelm has said it experienced “significantly softer trading” in the first six weeks of its 2027 financial year, driven by the unprecedented heat the UK experienced over the summer.

In guidance for the next financial year, Dunelm projected its adjusted profit before tax would be broadly in line with the £211 million it reported in its preliminary results for the financial year to June 2026.

This figure was itself unchanged from 2025 despite a 3.1 per cent growth in sales.

The retailer has also revealed a plan aiming to reduce £100 million of its costs by its 2029 financial year, targeting what it identified as “unproductive costs” with a goal of reinvesting this money into growth initiatives.

The strategy, dubbed “Winning Hearts & Homes”, also includes measures such as simplifying and improving its ranges to increase customer trust, expanding its estate by up to ten stores per year for the next three years and renovating existing sites.

The company expects that these measures will incur non-recurring expenditure totalling £30-40 million across the next two years, primarily focused on strengthening its “foundational infrastructure”, alongside £125 million in increased capital expenditure.

Dunelm also plans to lean more on technology to improve its end-to-end processes. Recent technological developments at the organisation include the launch of its dedicated mobile app in February, as well as its adoption of an AI shopping agent in August powered by Google Cloud’s Gemini Enterprise.

Dunelm shares fell more than 13 per cent on Tuesday in the wake of the news.

Clo Moriarty, chief executive at Dunelm, said: “Dunelm is a special business. We have a strong track record, a market-leading position and, importantly, a significant opportunity ahead of us. We believe we can capture that opportunity through a customer-led, self-funded plan that builds on the many strengths that have made us successful for nearly fifty years.”

Moriarty has been in the role for almost one year, having left her role as Sainsbury’s chief retailer and technology officer to take over from ex-Dunelm chief Nick Wilkinson in October 2025.

---