Marks & Spencer is treading water under the leadership of Sir Stuart Rose and must make “fundamental” changes to its business strategy, a leading City analyst has warned.

Credit Suisse retail analyst Tony Shiret said M&S had made “no financial progress” under Rose and said the high street giant’s senior management had “managed to break” the chain’s food business.

“We conclude that even before the current rapid deterioration of profitability, the company had made no financial progress outside the £320m of largely supplier-funded cost savings initiated in 2004 and around £150m resulting from changes in accounting assumptions,” Shiret wrote in a 108-page research note for investors.

It went on: “Of greater concern has been the failure to address and reverse the company's drift towards a much older customer base. No business can have a long-term future with this type of demographic profile, in our view.”

The note, titled Do the Right Thing, ratchets up the pressure on executive chairman Rose, who took the reins in 2004 after joining from retail group Arcadia.