The company’s shares slumped 20 per cent in early trading – wiping £1.7bn from its stock market value – as it said a poor performance over the crucial Christmas period pushed underlying sales down by 2.2 per cent in the third quarter.
M&S chief executive Sir Stuart Rose, in a radio interview, said: “There’s a squeeze going on and everyone is feeling that.”
Expressing concern over slowdown in the market, Rose said “We are saying that we think that 2008, and possibly into the first part of 2009, is going to be tough out there.”
His gloomy view of the year ahead echoes the warning last week from fashion retailer Next, which said it was extremely cautious on 2008.
A United Nations report on World Economic Situation and Prospects 2008 has warned of a present danger of the world economy coming to a near standstill. In the second half of 2007, bursting of the housing bubble market in US and unfolding credit crisis has induced uncertainty across global financial markets.