DUNELM has seen annual profits leap nearly a third higher to a new record, but flagged an "extremely challenging" wider economic backdrop.

The homewares retailer reported that pre-tax profits jumped 32.4% to £209 million on a pro forma 52-week basis, up from £157.8 million the previous year.

Dunelm said sales had remained "robust" in the first 10 weeks since its July 2 year-end, although they were lower than a year earlier when trading was boosted by a delayed summer sale and the reopening of stores as Covid-19 restrictions lifted.

Its costs have been soaring, with inflationary pressures - mainly on staff wages - adding another £17 million to its annual operating expenses, and it said it would "continue to relentlessly focus on making every pound count".

It stuck by forecasts for the new financial year in spite of the gloomier consumer spending outlook and cost woes.

Chief executive Nick Wilkinson said: "We feel confident and well prepared to weather the current economic pressures - we emerged from an unprecedented global pandemic as a bigger, better business and we believe we have the tools in place to do that again.

"That said, the operating and economic environment is extremely challenging.

"In this environment, we have to make every pound count, both for ourselves through our tight operational grip and cost discipline, and for our customers, through our offer of outstanding value at all price points."

The group saw total sales jump 16.2%, with online sales accounting for 35% of turnover, up from 20% in 2018-19.

It said it increased pay by more than 7% on average for its 11,000 workers to help with the cost-of-living crisis.

The group added more than another 800 staff during the year.

The figures come after Dunelm recently named outgoing Whitbread chief Alison Brittain as its incoming chairwoman.

Ms Brittain joined the chain's board on September 7 as independent non-executive director and chair-designate, ahead of taking over from current chairman Andy Harrison before his nine-year term ends in September next year.

Prices rise by almost 10 per cent compared to last year

The rate of Consumer Prices Index inflation fell to 9.9 per cent in August, from 10.1% in July, the Office for National Statistics has said.

It is understood the slight drop was due to a fall in petrol prices during the past month.

​Parsley Box has reduced its headcount by nearly a third

PARSLEY Box has reduced its headcount by nearly a third as the ready meal delivery company grapples with a decline in online shopping volumes amid the cost-of-living crisis.

The Edinburgh-based company, which caters to consumers over the age of 65, narrowed its losses in the first half of this year despite a slump in revenues from both new and existing customers.

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Homeware store posts record profits