Risks and risk management Principal risks and uncertainties continued Principal risks and AT A GLANCE PRINCIPAL RISKS AND UNCERTAINTIES FY21 uncertainties key Impact compared Impact compared Increasing Risk to FY20 Risk to FY20 Competition, market Regulatory and No change and customers compliance Decreasing Resilience IT systems, data and cyber security New Brand damage Supply chain disruption Climate change and environment Business efficiency People and culture Finance and treasury Risk How we mitigate Progress in FY21 COMPETITION, MARKET • Customer strategy in place, to continue • Dunelm continues to lead the UK AND CUSTOMERS to drive our multichannel proposition, homewares market with an increased refined post Covid-19 to accelerate estimated share of 9.1% in 2021 (2020: Description growth levers. 7.5%) (Source: GlobalData). Failure to respond to changing consumer • Focus on new product development, • Development of our strategy includes a needs e.g. the shift towards online particularly own brand, in both existing significant increase in our sustainability sales, personalisation, rental versus and new categories, to strengthen our programme, and an enhanced ownership, sustainability and customer offer. Continue to make our products experience. experience, and to maintain a competitive and their packaging more sustainable. • Improved insight on our customer base offer (range, quality, value and ease of • Investment in brand marketing, digital enabling us to understand who they are shopping) could impact profitability and engineering, data and insight capability and how they shop with us. limit opportunities for growth. and services to raise awareness of the • Completed the re-engineering of all A downturn in consumer spending, Dunelm brand and meet customer foundational digital micro-services: aggressive competitor activity (especially needs. checkout, product information with cost price pressures) could impact • Investment in supply chain capacity management and delivery promise. sales and profit. and capability, doubling peak volumes • Increased brand awareness through and reducing lead times. Improved our continued investment in brand Link to strategy: Click & Collect proposition enabling us marketing, including sponsorship All focus areas to serve customers even when stores of First Dates. are closed. • Further developedClick & Collect Performance indicator: • Monthly customer insight report tracks Market share capacity and functionality to include performance against the market, contactless, ‘to car’ and for products Executive responsibility: competitors and other key indicators. that are centrally fulfilled. Chief Executive Officer • Introduced more newness and choice Reports to: Board oversight: in core ranges with products from N/A • Reviewed annually in depth by the recycled materials, home hygiene Board at its strategy days and individual and wellbeing at home collections. Impact compared to FY20: topics considered throughout the year. • Continued product innovation in existing categories and strengthened seasonal campaigns and promo buys to improve affordability to our customers. 80 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021