This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7484700.stm

The article has changed 18 times. There is an RSS feed of changes available.

Version 4 Version 5
Sales gloom sees M&S shares dive Sales gloom sees M&S shares dive
(10 minutes later)
Marks and Spencer shares have fallen by more than 20% after it warned a slide in consumer confidence had hit sales.Marks and Spencer shares have fallen by more than 20% after it warned a slide in consumer confidence had hit sales.
Underlying UK sales dropped 5.3% in the past three months with its food business - which focuses on top end goods - being badly hit.Underlying UK sales dropped 5.3% in the past three months with its food business - which focuses on top end goods - being badly hit.
The director of its food business is leaving the firm immediately as part of a management reshuffle.The director of its food business is leaving the firm immediately as part of a management reshuffle.
M&S called conditions "challenging" and the news saw shares in other retailers, such as Next, also fall sharply.M&S called conditions "challenging" and the news saw shares in other retailers, such as Next, also fall sharply.
Growing concerns?Growing concerns?
M&S said that general merchandise sales had lost ground - but were in-line with the downturn seen by competitors.M&S said that general merchandise sales had lost ground - but were in-line with the downturn seen by competitors.
By 0830 BST, M&S shares were down 21%, or 68 pence, at 250p.By 0830 BST, M&S shares were down 21%, or 68 pence, at 250p.
Seymour Pierce analyst Freddie George said that it was inevitable there would be worries about the firm's position.Seymour Pierce analyst Freddie George said that it was inevitable there would be worries about the firm's position.
He said that concerns will grow over "the strategy on food and the refurbishment programme, and the high debt levels of the group".He said that concerns will grow over "the strategy on food and the refurbishment programme, and the high debt levels of the group".
FROM THE TODAY PROGRAMME More from the Today Programme
The High Street retailer had already expressed caution about consumer sentiment in May, when it said there had been a "mixed" start to its 2008/9 financial year.The High Street retailer had already expressed caution about consumer sentiment in May, when it said there had been a "mixed" start to its 2008/9 financial year.
But chairman Sir Stuart Rose said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging".But chairman Sir Stuart Rose said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging".
But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market."But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market."
Challenging conditionsChallenging conditions
M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June.M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June.
Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%.Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%.
M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores.M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores.
"Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said."Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said.
"In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives""In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives"
This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct.This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct.
Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses.Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses.
M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year.M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year.