Homeware retailer Dunelm has said it plans to strip around £100 million of “unproductive” costs from the business as part of a new three-year growth strategy, after cutting its central teams by around 8%.

The cost-cutting programme will aim to make savings by the 2029 financial year through restructuring and changing internal processes.

Dunelm said work was already underway and, in the past three months, it has removed around 8% of “central roles” within the business to “simplify the business and reduce central costs”.

This amounts to around 95 job losses across its support functions and distribution.

The three-year strategy also includes efforts to improve and simplify the retailer’s product ranges, renew its chain of shops and open new ones.

Dunelm said it was targeting around 100 potential locations for new stores, with up to 10 new openings per year for the next three years.

Each store opening is expected to create around 50 jobs.

It is also hoping to make greater use of artificial intelligence (AI) and automation to make processes more efficient, and plans to roll out radio-frequency identification (RFID) chips that are hidden in products to improve the accuracy and availability of stock.

The plans were unveiled after Dunelm said trading had been dampened because of unusually hot weather since the new financial year, which began at the end of June, affecting people’s shopping patterns.

The retailer said it was continuing to see “challenging” conditions weigh on consumer confidence, including “elevated interest rates and inflation, and a changing UK political landscape”.

Nevertheless, the company reported total sales of £1.83 billion for the year to June 27, up 3.1% compared with the year before.

Its pre-tax profit was flat year-on-year at £211 million.

Dunelm’s chief executive Clo Moriarty said: “Over the last year, we have taken a deep and honest look at our business and the opportunities ahead to better serve our customers and drive the group’s performance.

“This work has given us confidence that the opportunity in front of Dunelm is larger than we previously understood, but also that we need to evolve.

“The strength of our business and balance sheet means we are well placed to invest for the future and accelerate our growth trajectory.”