M&S SALES GROW DESPITE SLUMP FEARS

The group posted like-for-like sales growth of 2% for the three months to June 30, surprising both investors and analysts, who were bracing themselves for a trading slump.

But while the high street giant's figures were better-than-expected, the sales growth was the worst recorded for six quarters as M&S battled against wet weather conditions and uncertainty over consumer spending after five rate hikes in less than a year.

The group's sales figures - seen as an insight into the wider health of high street trading - compare with a rise of 8.2% in the first quarter of last year.

Food sales saw only marginal growth over the past three months, rising by 0.7% on a like-for-like basis, although the group posted a 2.9% rise in like-for-like sales of general products as shoppers turned to homewares in the dull weather.

Stuart Rose, M&S chief executive, said he was "pretty pleased" with the results, given the adverse conditions faced by the chain and disruption caused by a sweeping store refurbishment programme.

He added that trading would remain "very challenging" in the short-term, but would not derail its recovery plans.

The retailer only recently made a return to health after almost a decade of depressed sales.

M&S reported a 28.5% rise in annual profits to £965.2 million in May, close to the £1 billion seen in 1998 before the group hit more troubled times.

The firm stressed it would push on with store openings and its refurbishment programme, with plans to expand its retail space by 4.5% this year. M&S also hopes to revamp 70% of its store portfolio in time for the "critical" Christmas period.