Retailers whose fortunes depend on an active housing market have welcomed new signs of life such as more mortgage approvals and transactions. 

Retailers whose fortunes depend on an active housing market have welcomed new signs of life such as more mortgage approvals and transactions. 

Next boss Lord Wolfson also expects economic benefit in the short-term, but issued a salutary reminder along with last week’s interims that a housing market revival is not necessarily all good news. He warned that a “loosening” mortgage market and Government stimulus measures may “result in an unhelpful house price bubble”. That may result in a big drag on the economy when interest rates rise. 

He also argued that house price inflation, in the absence of house building, “is as dangerous as any other type of inflation and ultimately represents a transfer of wealth to property owners from those who do not own their own home”.

They were good points well made. 

Also, earnings are not rising with inflation. There seems little reason to disagree with Wolfson’s view that, for the consumer economy, recovery is not here yet.

Dunelm aims to stay on top

Homewares group Dunelm tends to keep quiet other than when it formally reports. And when that happens, the news is generally good. 

Dunelm posted prelims last week showing rises of more than 12% in sales and profits in a year when it overtook John Lewis to claim the number one sector spot by market share. It holds 6.9% of the £11bn homewares market.

Most of Dunelm’s growth to date has come from stores, and it still sees scope to increase branch numbers from 135 at present to 200. But perhaps the biggest opportunity in future will come from multichannel.

Today, multichannel represents just 4% of its business – and that’s after 80% growth last year. Dunelm is now investing in better home delivery and a platform upgrade.

That must be welcome. Dunelm is well run and a great success, but retail is changing so fast that it cannot afford to fall behind the times as shopping habits change.