Retail giant Marks & Spencer shook the City today as a surprise profit warning sent shares tumbling.

M&S sales plunged 5.3 per cent in the 13 weeks to June 28. The company posted annual profits of £1billion two months ago but saw shares fall as much as 21 per cent.

The update – a week earlier than expected – came as chief executive Sir Stuart Rose warned consumer confidence levels had “deteriorated markedly”.

M&S added director of food Steven Esom, who joined from Waitrose just over a year ago, was leaving immediately after a “significantly weaker” performance from the food business.

The group’s sharp sales decline since the end of March amid soaring food and fuel costs represents an acceleration from the 1.7 per cent like-for-like fall in the first three months of the year.

General merchandise has been hit by the tough conditions, down 6.2 per cent, although the group has managed to hold its share of clothing sales.

But food sales – 4.5 per cent lower – suffered due to increased promotions and competition from supermarkets, as well as “changes in consumer buying patterns” as customers trade down to cheaper alternatives.

Sir Stuart warned the economy was in a “very uncomfortable place”.

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Retail giant Marks & Spencer shook the City today as a surprise profit warning sent shares tumbling.

M&S sales plunged 5.3 per cent in the 13 weeks to June 28. The company posted annual profits of £1billion two months ago but saw shares fall as much as 21 per cent.

The update – a week earlier than expected – came as chief executive Sir Stuart Rose warned consumer confidence levels had “deteriorated markedly”.

M&S added director of food Steven Esom, who joined from Waitrose just over a year ago, was leaving immediately after a “significantly weaker” performance from the food business.

The group’s sharp sales decline since the end of March amid soaring food and fuel costs represents an acceleration from the 1.7 per cent like-for-like fall in the first three months of the year.

General merchandise has been hit by the tough conditions, down 6.2 per cent, although the group has managed to hold its share of clothing sales.

But food sales – 4.5 per cent lower – suffered due to increased promotions and competition from supermarkets, as well as “changes in consumer buying patterns” as customers trade down to cheaper alternatives.

Sir Stuart warned the economy was in a “very uncomfortable place”.”Everybody is going to have to swallow hard and cut our cloth accordingly.”

The sudden departure of Mr Esom came because M&S wants to “increase the pace of change” in the food business, the group said.

In May it announced initiatives including pilots to sell branded food favourites such as Marmite and Heinz baked beans.

“We want to make sure that our business is fully equipped to meet the downturn, which is going to be longer and more hard-fought than first anticipated,” Sir Stuart said.