Kingfisher Plc Chief Executive Officer Ian Cheshire said he is more optimistic about the U.K. as unemployment stabilizes and events such as the London 2012 Olympics buoy consumer sentiment.
“The leading indicators for the second half of the year are looking a bit better,” the CEO said in an interview at the Retail Week conference in London. “Overall on the U.K. consumer, I’m slightly more comfortable about the end of the year than I was maybe six months ago.”
The more upbeat tone contrasts with comments in February that the U.K. was a “tough market” and will continue “bumping along the bottom.” Instead, Cheshire said confidence measures are improving and Britons are “beginning to move on and think about the future, rather than dwelling on the crisis.”
The U.K. will have a “difficult” first quarter and easier second quarter, he added. The French market is “still holding up,” with about 3 percent growth overall, Cheshire said. “Our sense is the euro zone has probably been stabilized by the last set of interventions before the anxiety fed through to consumers.”
The owner of the Castorama and B&Q stores is working on innovations like snap-together tiles and adding DIY advice to build customer loyalty. Only about 2 percent of sales come directly from online, while as many as 80 percent of people use the Internet to research before or after they buy products.
“The level of contact and interest in contact is going up much faster than the absolute classic online delivery-to-home transactional value,” Cheshire said. About 20 percent of customers who spend the most and have the greatest brand contact want more advice on activities including planning kitchens.
Last month the retailer said annual earnings rose about 20 percent as the addition of more-profitable own-brand lines and improved product-buying helped combat a “challenging” climate.