A large addressable market with a clear runway for growth A LARGE, FRAGMENTED MARKET >£25bn1 Market recovery Focus on the home In FY21, our markets returned to FY19 Post-pandemic, there is a renewed Market size of UK homewares and levels and are predicted to grow in low focus on the home with interest furniture combined. Significant single digits over the coming years.1 in home-making, wellbeing and headroom to grow, with 9.1% sustainability continuing to rise. share of homewares market and only 1.3% share of furniture market SIGNIFICANT HEADROOM H‘ome Lovers’ H‘igh value’ customers 50%+ 12% Our ‘high value’ customers make up Over 50% of UK households are 12% of customers and c.40% of sales ‘Home Lovers’ (highly engaged2 shoppers who look to improve, These customers: style and shop for their homes) • Shop more than one product category. • Shop across both digital and physical channels. • Have a deeper emotional connection to Dunelm.3 OUR RUNWAY FOR GROWTH Growing customer base Customers who shop across categories and channels shop around and frequency 5 times more often and spend around 6 times more 6 300 • In FY21, we grew our total number + channel of customers by 8.5%.4 5 250 • In FY21, the number of digital and multichannel customers grew by5 4 200 106%. • Moving forward, share gains will 3 150 be driven equally from acquiring + category new customers and increasing their 2 100 purchase frequency. 1 50 1.Source: GlobalData, market data quoted includes VAT – 12 months to June 2021 and 0 0 forecasts as at July 2021. Single-category, Multi-category, Multi-category, 2. I nternal analysis based on Dunelm household single-channel single-channel multichannel segmentation research, February 2019 and August 2020. ■ Transactions per customer ■ Spend per customer 3. Dunelm customer survey, March 2021, 68% of ‘high value’ customers love or like Dunelm vs. 54% of other customers. Source: Internal analysis based on Barclays Analytics. 4.Unique active customers who have shopped Represents FY21 data — transaction and spend (inc. VAT) per customer over 12 months. in the 12 months to June 2021, based on management estimates using Barclays data. 5. Unique active customers (as defined above) who have shopped either online only or online and in a store. DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 27 STRATEGIC REPORT GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION egarevahtnom-21remotsuc rep snoitcasnart egarevahtnom-21)£( remotsuc rep dneps