Macroeconomic Trends

The UK retail sector continues to experience high levels of volatility and uncertainty as consumer confidence remains low as we enter into Brexit. The market landscape is also rapidly changing and many new retailers are entering the market as we see traditional barriers to entry reduce. At the same time, customer behaviours and expectations have changed, leading to some of the well-established retailers exiting sections of the homewares and furniture market.

At a time when the market has been challenging, consumers have still been willing to invest in their homes, especially when they find good quality products that are value for money and come with a great shopping experience. Online shopping is now becoming part of almost every shopping mission and technological advances are providing the customer with sharper images enabling them to view not only what the product looks like, but also establish its quality.

However, with this political uncertainty and pressures like increasing food inflation potentially leading to customers spending more on essential resources and less on non-essential resources, we remain cautious on the outlook for FY20.

How We are Responding

At Dunelm, we have an offer that appeals to customers whether they are moving house or choosing to stay in their current home, and we believe this provides a significant opportunity to continue to grow in the UK as we become the customers’ number one choice for homewares and furniture. We are clear the market is becoming more multichannel and customers will expect a combination of ordering and choosing products online but to also visit stores to touch and feel the product, or just to collect the item in a convenient and timely way. We are responding well to these market conditions and are clear on the opportunities this will present to Dunelm.

The Homewares Market*


The UK homewares market is worth an estimated £13.5bn per year.

Online penetration is growing fast and ahead of the market. Growth is estimated to be 14.8% in 2019 (2018: 14.0%), and is forecast to reach 17.2% by 2023. However, stores continue to play a vital role in the growth of online shopping as customers can search and browse and be inspired online but touch and feel the products in store.

The homewares market is impacted by social media and influencers are encouraging consumers to refresh their homewares more often, meaning ranges are becoming more fashion-led and lower ticket items are becoming important as they can be replaced more frequently.

Market size £bn

Key growth drivers

  • Fashion and design-led ranges increase visit frequency
  • Online provides more choice and convenience
  • Technology enabling a better online shopping experience
  • Store space and new formats improve experience

Key growth inhibitors

  • Food price inflation leading to a reduction in non-essential homewares spend
  • Economic uncertainty and price competition
  • Leisure favoured over retail

The Furniture Market


The UK furniture market is estimated to be worth £11.4bn in 2019. The market has been impacted by economic uncertainty, lower consumer confidence and the weaker housing market.

However, the online furniture market is expected to be one of the fastest growing markets between 2019 and 2023 as customers become increasingly more comfortable with big tickets purchases (Global data). Online penetration is forecast to grow to 22.4% by 2023.

Technology is supporting this growth journey by providing customers with sharper, clear images on screen, videos and angles that allow you to see the product quality up close. Technology like augmented reality allows the customer to place the product in their home using their mobile phone before deciding to buy online.

Furniture retailers must do more to link their online and store experience to enable customers to shop how and when they want.

The market is expected to continue to consolidate and Dunelm is well positioned to build on its multichannel offer to provide the customer with a wide range of products in co-ordinated collections at a great price.

Market size £bn

Key growth drivers

  • Online growth: lower overheads, broader ranges, keener prices, convenient deliveries
  • Technology enabling a better online shopping experience
  • Growth in sales of bedroom furniture categories will be driven by increasing well-being and health awareness
  • Growth in sales of living room furniture as space is more constrained and innovative storage solutions are needed

Key growth inhibitors

  • Economic uncertainty, inflation and price competition

* Homewares market data is based on GlobalData analysis.

Furniture market data is based on GlobalData analysis.

Key differentiators

  • Product obsessed – focus on style, quality and value
  • Everyone’s welcome in our home
  • Multichannel convenience – shop when, how and where you want
  • Our people – friendly and knowledgeable service