Sir Stuart Rose has restructured the food business along pre-Steven Esom lines following the departure of the M&S head of food last week.

Speaking at the agm this week, Sir Stuart said the restructure came in the wake of "operational issues" that had led to problems "centred around cataloguing, price and promotions".

Sir Stuart, who was bruised but unbowed by shareholder wrath over his dual roles of chairman and CEO, said there had also been problems with "the level of innovation we have seen around our food business in the last year."

Under new head of food John Dixon, merchandisers have reverted to the way they worked before Esom joined, and now once again report to category directors rather than work in a separate team of merchandisers.

There had been no redundancies and no new directors recruited, stressed a spokeswoman, who described the changes as "tweaking". Over the next two years M&S would introduce an automated stock-ordering system, she added .

Commenting on Esom's departure, Sir Stuart expressed his regret: "It was just one of those situations where it didn't work," he said. "He regrets it and I regret it more than he does. But when something doesn't work out you have two options: stick with it or take action. We took action."

Sir Stuart insisted the business was far stronger than when he took the helm four years ago. "We've not only added market share but we've added an additional £700m sales in the past three years," he said. "We've rolled out Simply Food from 130 stores then to about 300 today."

He refused to discuss speculation that Sainsbury's, Qatari investment fund Delta Two or Sir Philip Green could make a bid for M&S.

Jonathan Pritchard, retail analyst at Oriel Securities dismissed the rumours as gossip. "It is most unlikely in the current environment," he said.