Dunelm has posted a sharp drop in sales during its fourth quarter despite hailing “significant” growth in its online business.

The homewares specialist said total sales tumbled 29% in its fourth quarter, as like-for-likes in its stores slumped 50%.

Online sales almost doubled during the 16 weeks to June 27, rocketing 85%. Sales fulfilled via home delivery surged 106% as shoppers stayed at home even as the UK started to loosen lockdown restrictions.

Dunelm closed its stores and online operations on March 24 but has reopened all of its shops in phases over the past three months, with social distancing measures in place.

Its 148 in-store cafes remained closed, although Dunelm said it expects to reopen these before the end of July. 

Dunelm said it had “benefited” from the investments it has made in its online offer, which allowed it to grow ecommerce sales, lay on virtual ‘made-to-measure’ consultations with shoppers and launch a ‘dark store’ contactless click-and-collect offer during lockdown. 

The retailer added that its supply partners have also ramped up their direct-to-consumer capabilities, which are now running at four times pre-Covid levels in order to meet increased online demand. 

Despite the performance of its website, Dunelm admitted it made losses during April and May and said full-year sales were down 3.9% to £1.06bn. 

But the business still expects to register pre-tax profit of between £105m and £110m when it unveils its preliminary results in the coming months. 

Dunelm boss Nick Wilkinson said: “The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business. 

“This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers. There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.”