Kingfisher, the largest DIY retailer in the Europe announced better-than-expected results with 21.9% growth in the profits despite facing declining demand that pushed the Kingfisher B&Q management to implement cost-cutting initiatives.

Weakening demand in the UK and Ireland regions posted a major challenge for the retailer as sales in these regions make up 40% of Kingfisher’s turnover; however, Kingfisher’s stores in France reported 1.4% rise in the half-year retail profit that made up to 15.8% hike, helping the B&Q chain to strike balance at the right time.

Ian Cheshire, CEO of Kingfisher said, “There will be some good periods and some more challenging periods. Obviously with VAT and public sector unemployment and tax increases, 2011 is looking like it will be challenging,”

“This was particularly the case in the UK, where trading conditions were likely to remain challenging for some time",

It seems that Mr. Cheshire is all set to face the challenges created by the bitter situations and Kingfisher is left with no other option than making constructive business moves to avert the recession-like circumstances.

“The more optimistic take on it is that we now know what we are going to be facing, and I think the more you come through to 2012, the clearer and more positive the picture is,”

"Our continued profit growth will come from our well-established self-help initiatives,” added Mr. Cheshire.

At present, Kingfisher plans to adopt cost-cutting measures in the operating costs by sourcing materials and products from countries where manufacturing costs are low, such as China.