Shares in UK retailer Marks & Spencer plunged more than 20% today (2 July) after the retailer issued a surprise profit warning amid weakening consumer confidence and slumping sales.

The retailer reported a 5.3% drop in same-store sales at its UK stores in the first quarter to 28 June, and warned market conditions are likely to remain difficult.

It added that like-for-like sales of its general merchandise, which includes clothing and footwear, were down by 6.2% in the 13-week period.

Total UK sales were down 0.5%, with clothing tumbling 3.6% M&S said. In contrast, international sales soared by 24.5% during the quarter.

Chairman Sir Stuart Rose said that since the start of the company's financial year, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging."

But he added the company is "holding market share in clothing."

Sir Stuart said: "We expect market conditions to continue to remain difficult and we are managing our business accordingly," with tight stock control and management of costs a priority.

In May the retailer posted a full year pre-tax profit of GBP1.007bn (US$1.98bn) - its best performance for a decade.

At the time M&S executives revealed they planned to cut costs by GBP50m in the coming year - and target new business overseas.

The retailer also said it said it would trim GBP200m from the budget allocated for its expansion in the UK and overseas, and that 80 - not the 90 stated previously - of its stores will be modernised by next March.

"We continue to expect gains in bought-in margin, although the outturn on gross margin is difficult to predict and will depend on market conditions and our trading stance," Sir Stuart said today.

"Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market."

Overall, the group has 622 UK stores and 278 international outlets.