Retailer Marks and Spencer issued a shock profit warning on Wednesday and said a consumer downturn was likely to be deeper, and last longer, than previously expected, hammering its shares.
The clothing, food and homewares group said in a trading update rushed forward by a week that sales at stores open more than a year fell 5.3 percent in the 13 weeks to June 28.
It added that Steven Esom, the head of its upmarket food business, was leaving after just one year in the job following a "significantly weaker performance" in that part of the group.
Chairman Stuart Rose said the sales update was "effectively an earnings downgrade" and warned others would follow suit.
"I can't believe this is a Marks & Spencer (M&S) exclusive problem, I think this is definitely a retail slowdown and we don't know where it's going," he told reporters on a conference call.
"This is certainly going to go right through into 2009. There is absolutely no sign of relief," he added, saying the downturn was likely to be "longer and harder fought" than previously expected.
Pali International analyst Nick Bubb cut his full-year profit forecast by 50 million pounds to 800 million and dropped his target price for M&S shares to 275 pence from 300p.
M&S shares, which have more than halved in value over the past year, fell 21.7 percent to 249p, near 7-year lows.
Many store groups are struggling amid fears that indebted shoppers will cut spending amid rising food, fuel and mortgage costs.
M&S said like-for-like general merchandise sales fell 6.2 percent in the 13 weeks to June 28, but that it was holding market share in clothing and outperforming in homewares.
Like-for-like sales in the group's upmarket food business were down 4.5 percent and Rose said M&S was losing market share.
He said the firm had responded to more price conscious shoppers with its "Dine in for 10 pounds" campaign and would look at similar initiatives.
John Dixon, currently the head of the group's Home and M&S Direct businesses, will become the new head of food, M&S said.
