DFS posted a healthy 10% uplift in its customer orders against a subdued market, but chief executive Tim Stacey signalled that the macro policy environment was constraining investment and growth potential.
Speaking to Retail Week following DFS’ results for the year ending June 29, 2025, which saw revenues increase 4.4% on the same period last year, Stacey said retailers had “bore the burden” of the last Budget and hoped that future economic policy would be more balanced.
“As retail, we all bore the burden on the employer’s National Insurance. So what would I hope for? A more balanced approach there. We absolutely support the National Living Wage approach, and we pay all of our people that.
“But let’s just put it this way – we have a cost contingency set aside because of unexpected terms in government policy. The burden of taxation-driven inflation is high in retail, and therefore we’ve had to slow down investment in some things, slow down our CapEx. I’d 100% rather spend the cash on the customer proposition and our people and AI and innovation and marketing – things to grow and develop the business.”
When asked what he’d hope to see change when the 2025 autumn Budget is announced at the end of November, Stacey said a move in stamp duty to stimulate the housing market, and a change in business rates.
“Relative to the online retailers, it just doesn’t have a fair balance around it,” he said. “So that would be something to look at, but whether they look at it, I don’t know.”
The furniture retailer saw underlying profit for the year reach £30.2m, slightly above previous guidance of between £25m and £29m. The growth was in spite of lower consumer confidence across the market and shoppers’ propensity to spend on so-called “big ticket items” softening.
“I think consumers are obviously concerned.” said Stacey. “You can see all the data points around savings ratios being really high, so people are saving money just in case. From our perspective, when consumer confidence improves – and that might be triggered by things like interest rate reductions or the employment market, or maybe the removal of uncertainty from the budget – I suspect we will start to see a nice market tailwind. But we’re not seeing that just yet.”
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