Electricals retailer Comet is to refurbish 40 stores his year as it seeks to respond to the revival of arch-rival DSGi and the touchdown of US powerhouse Best Buy.

The programme, designed to give Comet shops a more modern look and fresh consumer appeal, follow tests in seven stores last year.

Last year, parent Kesa reported, 248-store Comet generated a 13.9% increase in retail profit to £11.5m on sales down 0.6% to £1.65bn. The performance was in line with analysts’ expectations and Kesa chief executive Thierry Falque-Pierrotin was confident of improvement.

He said that store refurbs, a shift in product mix towards higher margin lines such as small domestic appliances and a planned “refresh” of the Comet brand – more details of which are expected later today – would help Comet. “All this gives us confidence about Comet’s ability to compete in the UK” he said.

Comet took market share last year – primarily from independents, Falque-Pierrotin believed – and made “significant gains” in white goods.

The retailer was also helped by “easing” gross margin pressure and cost reduction as a result, for instance, of the merger of two regions and the closure of a regional distribution centre.However, Comet’s like-for-like sales fell 1.4% in the year.

Falque-Pierrotin said consumer spending will remain “under pressure” across Europe as governments act to reduce deficits. He said that there was sufficient time to plan for implementation of the VAT rise announced in yesterday’s UK budget and that Comet would “follow market trends” in pricing – which will be affected by deflation as well as the VAT rise.

At group level Kesa, which also owns the Darty chain in France, posted a 28.1% increase in retail profit to £98.6m on sales up 3.4% to £5.12bn. Adjusted profit before tax was up 17.8% to £81.9m.

Falque-Pierrotin said that the World Cup had lifted TV volumes by between 30% and 35% across the group.