Bellwether retailer Next will give the City a feel of consumer confidence on the high street, while B&Q owner Kingfisher is expected to outline its plans to battle the new proprietors at rival Homebase.

High street chain Next is expected to post lower-than-expected annual profits on Thursday, leaving investors to wonder whether 2016 will be another tough year on the high street for clothing retailers.

The firm downgraded its central full-year profit forecast to a rise of 4% to £817 million in January, from £827 million, after it blamed unusually warm weather for a "disappointing" festive sales performance.

The well-regarded retailer posted a shock 0.5% fall in sales across its 540 stores in the 60 days to December 24, while growth across its Next Directory online and catalogue arm slowed sharply to 2% as its trading woes were compounded by stock shortages and tougher online competition.

However, the group said its move not to discount ahead of Christmas meant its full-year profit range was maintained at between £810 million and £845 million.

Lord Wolfson, chief executive of Next, said sales of coats and knitwear were hit particularly hard in the run-up to the festive season.

While the group said the warm weather was the main reason for its disappointing trading, it admitted that it had suffered due to stock shortages after failing to anticipate a bigger-than-expected shift in buying patterns.

"We would not want to allow difficult trading conditions to mask any mistakes and challenges faced by the business," the group said.

It added: ''Specifically, we believe that Next Directory's disappointing sales were compounded by poor stock availability from October onwards.

''In addition, the online competitive environment is getting tougher as industry-wide service propositions catch up with the Next Directory.''

More people than expected are moving away from its print Directory towards online shopping, according to Lord Wolfson.

Analysts at Haitong said that sales at Next Directory, which has been an engine of growth for the last decade, have been slowing, partly due to the establishment of clothing operations at US online firms Amazon and Google.

The broker added: "Next has been unable to stimulate sales growth from the Directory to the extent it has wished."

Next said over the coming year it is budgeting for full price sales growth of between 1% and 6%, adding that it expects profits to grow in line with revenues.

The City will want an update on how B&Q and Screwfix owner Kingfisher plans to battle the new competition that has swept into the DIY sector when it posts its full-year results on Wednesday.

Rival Homebase was bought by Australian conglomerate Wesfarmers for £340 million in January from Argos owner Home Retail Group, in a deal that brings a new player with deep pockets into the competitive UK market.

Supermarkets-to-industrials firm Wesfarmers has a market valuation of almost £22 billion, and is the largest private sector employer in Australia with around 210,000 staff.

Wesfarmers managing director Richard Goyder called the £38 billion UK home improvement and garden sector an "attractive market".

However, the City expects to see Kingfisher's annual pre-tax profit fall by 4% to £688 million as the group presses on with its revamp and its UK store closure programme that will scrap 60 stores and hit up to 3,000 jobs.

This comes after Kingfisher said in January, following the Homebase sale, it would boost annual profits by £500 million over five years at its powerhouse trade-focused hardware arm Screwfix as it looks to step up the group's financial performance.

It also pledged to return £600 million to shareholders within three years through a share buy-back scheme.

Kingfisher chief executive Veronique Laury said its strategy focuses on "three key pillars of creating a unified, unique and leading home improvement offer, driving our digital capability and optimising our operational efficiency".

The group said its third quarter like-for-like sales growth picked up pace at its DIY chain B&Q in the UK and Ireland, rising by 2.4% in the quarter to October 31, thanks to strong sales of outdoor seasonal goods and building products.

Screwfix was once again the star performer, with same store sales jumping by 13.3% as it continued to benefit from growth in house building and as more homeowners shy away from DIY and turn to tradesmen to do work for them.

But trading continued to suffer in France, where it trades as Castorama and Brico Depot, with sales edging just 0.1% higher in the three months as it battles against ongoing weak consumer confidence and a declining housing and construction market.

Analysts at Numis said "we expect investor attention to focus on the Easter trading backdrop" as well as the latest updates from its turnaround programme.