AS more than one wag put it last week — taking inspiration from the company’s hugely successful ad campaign — this isn’t just a slump. This is an M&S slump.

More than £1.25 billion was wiped off the high-street giant’s stock-market value after the food and fashion group warned that sales and profits are tumbling as consumer confidence evaporates.

It is not the first retailer to show the extent of the damage done by the economic downturn. In the past few months, several smaller retailers have collapsed, furniture chains Land of Leather and SCS are struggling to survive and electrical giants DSG and Comet have warned that the outlook is bleak. And on Friday, John Lewis, which so far this year had appeared immune to the high-street chaos, said sales had fallen 8% at the end of June. Electrical and homeware sales were hit hardest. Most analysts, however, are still unsure if the slump is simply a result of consumer caution or a sign of greater malaise.

M&S blamed much of its problems on food. It said the slump in food sales — which led to the sudden departure of Steve Esom, head of food, just one year after the former Waitrose boss was paid a £500,000 golden hello — occurred because customers were trading down. Sales at the £4.2 billion food business are down 4.5% at a time when supermarket sales figures are being helped by inflation.

Sir Stuart Rose, executive chairman of M&S, did, however, concede that 40% of the blame lay at the company’s feet for moving too slowly.

City observers are not so kind. Tony Shiret, an analyst at Credit Suisse, said there was “a lack of any clear idea from management that they had a grip on the problems”.

Food is clearly at the root of a lot of the company’s problems. Rose accused Esom last week of “plodding”, claiming the pace of change was too slow. That is something the retail community agrees on.

M&S has, for example, built the success of its food section on ready meals. It has failed to notice the sector’s steady decline over the past few years as shoppers are opting for fresh food and home cooking.

Another challenge is the ageing profile of its food shoppers — loyal M&S food lovers are older than the company’s core clothing customers.

Lack of choice is still a problem, too. The chain is belatedly starting to stock branded goods, but it is clear families are increasingly doing their main shop elsewhere. And, as many retailers have produced top-quality ranges to go with their value lines, consumers can still pick up the “treat” items they once bought at M&S.

Furthermore, the role of clothing cannot be ignored in the downturn of M&S’s fortunes. Sales of clothing over the past three months are down 6.2% on last year’s levels. Once again, say analysts, there are signs that management has taken its eye off the ball.

One retail analyst, who did not want to be named, said: “Rose made good inroads at decluttering the stores when he first joined and focused on differentiating the ranges. That’s not happening now. It’s hard to find things and it’s likely that, if you are looking for something in particular, you won’t find what you need.”

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