Commentary: Customers abandon Rose's stately ship

It's a profit warning in all but name, an admission that business is not going well at the high street's great flagship.

Rose is quick to blame the "difficult environment". There's no denying these are tough times in UK retailing, in food and clothing, M&S's two main sectors.

But while M&S is reporting a slump of 6.1 per cent in sales compared with the same three months last year, Tesco came in this week with a rise of 4 per cent. That's a swing of 10 per cent.

Tesco is battling against the same headwinds but is somehow managing to stay ahead - M&S is slipping behind. It's worth, too, going back to how things were when Rose first took over, now more than four years ago.

Before he arrived, the store chain was making annual profits of £784million. Soon after he joined, Rose braced the market to prepare for a fall and that duly came, at £615 million. Then they recovered, to £725 million.

Rose got the group humming again and pulled out all the stops, pushing profits to the magic £1 billion mark. Now, though, they're on the way down again, slipping towards, City analysts predict, somewhere between £550million and £660 million.

In other words, in terms of performance, M&S is back where he started. Quite why it's dropped again is a question that must haunt Rose and should worry shareholders and staff. He injected confidence and elan, revitalising womenswear, introducing celebrity models, making the clothes glamorous and emphasising the quality and green credentials of M&S's food.

Much of that new look still remains but the company has not been able to keep up the momentum and push on. Rose says it's the fault of the downturn and there's no doubt that has had an effect. However, other retailers are similarly affected and have not suffered to the same extent. If M&S is a ship, it is the classic stately cruise-liner, unable to move at speed when conditions demand and negotiate tight corners.

Other chains have been able to respond quicker to shoppers' demands for increased value for money. That's certainly the case in M&S food, which feels too overpackaged and over-priced. In clothing, M&S seems stuck - struggling to compete with the likes of Primark at the bottom and not smart enough at the top end.

As Rose has indicated, he is cutting operating costs and capital expenditure. What this means in a nutshell, is staffing and store refurbishment.

While that represents sound housekeeping, it highlights the problem Rose faces: his customers expect a high level of service in return for their extra money and many of his shops, especially the smaller branches, urgently require overhauling.

M&S is in far stronger shape than when Rose arrived. It will survive the current storm, something that might not have been said if it had remained under the previous management. Today's news highlights the fact that for all the pizzazz he has brought in, underlying problems remain.