MARKS & Spencer has admitted it has lost touch with its shoppers as it suffered a slump in sales over Christmas.

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 20 and by 2.3 per cent in the critical 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 company did not provide a like-for-like comparison.

Chief executive and chairman Luc Vandevelde said the overall appeal of the retailer's adult clothing ranges was "simply not good enough".

While the number of shoppers coming into its stores increased over Christmas, "the inconsistent appeal of our adult clothing ranges caused lower than expected sales".

This led to excess stock and higher marking down of goods in an effort to clear them.

However, food sales fared better, with like-for-like sales ahead 2.1 per cent in the 16 weeks and 2.3 per cent in the eight weeks.

The other bright spot was in sales of home furnishings, which lifted by 9.5 per cent in the 16 weeks and 6.7 per cent in the eight-week period.

Mr Vandevelde was optimistic that there were signs of progress, with an improving trend in food and home sales, more cost-effective buying and better margins, particularly in general merchandising.

"But I am under no illusion as to the main challenges facing the business.

"We must offer our customers adult clothing ranges of consistently better design and appeal. I am absolutely committed to making this happen," he said.

Group finance director Robert Colvill insisted now was not the time for Marks & Spencer to hit the panic button and implement a series of cost-cutting measures, such as widespread store closures.

The problem was simply a merchandising one - getting the right goods into the right stores.

The group's reorganising of its buying processes in the summer came too late to influence the autumn ranges, but M&S had identified where it needed to make changes, particularly in adult clothing and womenswear.

"We lost touch a bit, if I am honest, and we have to get that back," Mr Colvill acknowledged.

The group has been focusing on developing a new concept store format, and now has 25 shops with a new look and design.

These stores reported a four per cent sales increase over the Christmas period.

M&S saw its shares lift as the City digested the figures, which had largely been in line with forecasts - or as one analyst put it "as bad as expected".

"But the bottom line is that their ranges are still dreadful. They have been putting money into stores and refurbishment, but they have not seen a significant uplift," he said.

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 the Far East saw 1.5 per cent growth in the same period.

Shares in Marks & Spencer ended the day up 5p, at 205p