Value homewares retailer Dunelm like-for-likes edged up 0.6% in the 13 weeks to March 31.

Total sales grew 10.7% to £154.1m as the retailer opened two new stores.

The retailer said trading conditions “remained challenging through the third quarter”.

It said that multichannel sales were strong, but that footfall in stores dragged down  the overall performance.

Gross margin increased by about 30 basis points reflecting “continuing scale benefits as well as improved management of the clearance of both special buys and discontinued ranges”.

Dunelm expects gross margin growth for the full year will be about 20bps.

The retailer said its new store pipeline “remains encouraging”.

Dunelm chief executive Nick Wharton said:  “Our focus on the development of our Simply Value for Money proposition and growth both through new stores and through our multi-channel offering has seen Dunelm achieve a solid sales performance in what remains a very demanding retail environment.

“It is prudent to remain cautious about the wider economy and, recognising its impact on consumer confidence, we will maintain our disciplined approach to the management of gross margin and operating costs.

“However with a clear growth strategy and strong pipeline of new stores ahead we remain confident in the future prospects for the business.”