* Next profit up 5 pct, near top end of forecast range
* Next sees better times for consumer, but still cautious
* Kingfisher profit up 20 pct, above average forecast
* UK February retail sales miss forecasts
* Next shares down 0.7 pct, Kingfisher shares up 1.3 pct
By James Davey and Mark Potter
LONDON, March 22 Two of the UK's biggest
retailers, DIY group Kingfisher and fashion chain Next
, said conditions for consumers were likely to slowly
improve this year after a prolonged squeeze in disposable
Retailers across Europe have been struggling as spending has
been hit by rising food and fuel prices, muted wages growth,
worries about unemployment and government austerity measures.
Official data from Britain on Thursday underlined how any
recovery in sentiment will be a hard slog, as figures showed
another cut in spending last month.
"I don't think things are going to get any worse than last
year, they may get slightly better, but I don't think they're
going to get a lot better," Next Chief Executive Simon Wolfson
told Reuters on Thursday, after his firm reported a 5 percent
rise in 2011-12 profit.
Wolfson, a prominent supporter of Britain's ruling
Conservative Party who sits in the upper house of Parliament,
said although falling inflation was good news for the consumer
economy, its positive impact was being largely offset by
unemployment and tight credit availability.
He is also concerned that any worsening in the euro zone
sovereign debt crisis will feed through to the UK consumer.
February retail sales data from Britain's Office for
National Statistics (ONS) fell well short of economists'
forecasts on Thursday.
British retail sales suffered their biggest monthly fall in
nine months and were revised sharply downwards for January.
British chains are hoping summer events, such as Euro 2012
soccer, the London Olympics and celebrations to mark the Queen's
Diamond Jubilee, will stimulate trade.
"I think the feel good factor will be something that
gradually comes in through the year," Kingfisher CEO Ian
Cheshire told reporters after the group reported a 20 percent
rise in year profit.
"The combination of Jubilee and the Olympics won't create
immediate cash opportunities but it's an important part of
getting people into a more positive frame of mind."
Cheshire is also hopeful Wednesday's Budget statement will
boost the consumer. "Giving 3.5 billion pounds ($5.55 billion)
to 24 million people is a helpful step in the right direction,"
Next, Britain's No.2 fashion retailer, said it made an
underlying pretax profit of 570.3 million pounds in the year to
end-Jan, near the top end of its forecast range.
It is budgeting for sales growth of 1-4 percent in 2012-13
and profit in a range of down 2 percent to up 7 percent.
"In many ways, Next's figures are a microcosm of wider
trends in the retail sector: sales through physical stores are
under significant pressure while online is continuing to show
good growth," said analysts at Conlumino.
Kingfisher, Europe's biggest home improvements retailer,
made a pretax profit of 807 million pounds in the year to
end-Jan., slightly above analysts' average forecast, and
detailed the next phase of its growth strategy.
"We aim to create a real leader in our industry and really
break away from the pack," said Cheshire.
The group which runs the market-leading B&Q chain in Britain
as well as Castorama and Brico Depot stores in France and
elsewhere, plans to expand in existing markets and develop a
common range of products.
Many British retailers are still struggling. Furniture chain
DFS posted a 31 percent drop in first-half underlying earnings
on Thursday, while video games retailer Game on
Wednesday filed a notice to appoint administrators.
Next shares, which have risen 10 percent over the last three
months, were down 0.7 percent at 2,899 pence at 1119 GMT.
Kingfisher shares were up 1.3 percent at 304 pence. They
have surged 23 percent over the past three months.