Sir Stuart Rose has vowed that Marks & Spencer will "stick to its principles" of selling premium food despite poor first-quarter sales and the sudden departure of director of food Steven Esom.
Shares in the retailer sank by 25% to 240p - a seven-year low - after M&S revealed a drop in like-for-like UK food sales of 4.5%. Rose admitted M&S was "vulnerable" to the economic downturn and said Esom's departure had been decided "overnight" before the trading figures were released on Wednesday morning.
"When Steven came into the business - and he has done some good work - we brought somebody in to move the business forward in a more buoyant market," said Rose. "The market has changed. We felt now we needed to have somebody who needed to have a longer core experience of M&S to get us through this difficult period. Perhaps a different way of saying it is we needed a different horse for a different course."
Former Waitrose managing director Esom had been with M&S for just a year and was appointed to the board four months ago. He is understood to have been the author of Project Genesis, the controversial new trading terms M&S are demanding from suppliers.
He is replaced by John Dixon, previously director of Home and M&S Direct.
Rose said anecdotal evidence of shoppers trading down from M&S to cheaper retailers would not lead to the intoduction of cheaper own-brand lines. "We only offer the best quality in foods and that will be our continuing stance. Having said that, we can't ignore the demographics of the market place and there are one or two tricks up our sleeves we need to think about to show our customers we care," he said.
Meanwhile, M&S reported a 1.3% increase in group sales for the 13 weeks to 28 June. UK sales fell 0.5% during the period and overall food sales improved by 1.6% as the number of Simply Foods continued to grow.