Troubled retail giant, Marks and Spencer, today pledged not to "hit the panic button" and implement cost-cutting measures following disappointing Christmas sales.

Group finance director, Robert Colvill, said the problem was only a merchandising one and the fact that more people were coming to the stores was a good sign.

He said: "They are coming back but not necessarily liking what they see, so we need to address this."

He says M&S has 'lost touch' a little with its customers and would now be looking at ways of addressing this.

M&S revealed that although the number of shoppers coming into stores had increased over Christmas, sales fell by 5.1 per cent on a like-for-like basis in the 16 weeks to January 20.

The two bright spots for M&S were food and home sales which made further progress during this period.

A spokesman for M&S said that the inconsistent appeal of adult clothing ranges caused lower than expected sales.

Total clothing sales fell by 9.3 per cent in the 16 week period and 4.8 per cent in eight weeks to January 20.

By Deborah Bowyer