M&S is not the only retailer to suffer from the High Street slowdown

Like-for-like sales in the 13 weeks to 2 April were down 4.9% on the same period last year, the sixth quarter in a row in which sales have fallen.

For the year to 2 April, like-for-like sales were down by 5.1%.

M&S said 2004/05 profits were set to be between �610m-�625m ($1.15bn-$1.18bn), in line with analysts' predictions.

Tough times

M&S is by no means the only High Street retailer to be suffering in the current retail climate.

We believe we are making progress tackling the underlying issues that we face Stuart Rose, M&S chief executive See M&S's share price

Well-known names such as Boots and Jessops have issued profit warnings this year, and even fashion retailer Next has warned about sales prospects for 2005.

The British Retail Consortium (BRC) also said on Tuesday that consumer confidence remained "cautious", despite High Street sales rising 1.8% in March.

The BRC said the past month had been "hard going" for retailers, with only a brief surge in sales over Easter providing any respite.

In addition, traditional High Street retailers are facing increasing competition from supermarkets stocking non-food items. While M&S was announcing sliding sales on Tuesday, Tesco reported annual profits of more than �2bn - a record for a UK retailer.

"The trading environment continues to be difficult," said Mr Rose.

"The company is going through substantial change and we believe we are making progress tackling the underlying issues that we face."

Shares look up

Mr Rose is under pressure to revive the fortunes of the iconic retailer, having fought off a �4-a-share bid approach from entrepreneur Philip Green last year.

However, investors breathed a sigh of relief that despite issuing a downbeat statement M&S avoided another profit warning.

M&S shares were up 13.75 pence, or 4%, at 354.75p at the close on Tuesday.

Another positive note to come out of the update was that the rate of decline in clothes sales had fallen. Clothing sales were down 3.4% in the fourth quarter on a year ago, compared with a 4.4% drop in the previous quarter.

"There are signs of improvement, but trading is still woeful," remarked Simon Proctor at Charles Stanley.