Marks & Spencer yesterday admitted it had lost touch with its shoppers after Christmas sales slumped. Sales on a like-for-like basis, excluding income from new and refurbished stores, fell by 5.1 per cent in the 16 weeks to January 20th and by 2.3 per cent in the eight-week Christmas trading period to the same date.

The situation was bleak in clothing, footwear and gifts where total sales fell by 9.3 per cent and 4.8 per cent respectively, although the firm did not provide a like-for-like comparison. The group claims sales in the Republic were buoyant.

Marks & Spencer Ireland general manager Mr Steve Costello said the group's four Irish stores in Dublin and Cork performed exceptionally well. European sales, excluding the UK, were ahead 3.3 per cent in the 16 weeks and 2.9 per cent in the eight-week period. Sales in the Americas were up 4.5 per cent in the 16 weeks, while in the Far East there was 1.5 per cent growth in the same period.

M&S saw its shares lift as the City digested the figures, which had largely been in line with forecasts.