The retail sector was a sea of red on share traders' screens today after Marks & Spencer's shock warning on its food sales.

Among the biggest fallers were Next, down 69p (7.6%) at 8401/2p, Sainsbury, off 141/4p (4.6%) at 296p, DSG International, down 23/4p (6.2%) at 413/4p, and Kingfisher, off 4p (3.7%) at 102.7p.

The slump in consumer spending, soaring petrol costs and falling house prices are hitting retailers from the High Street to out-of-town retail parks.

Lord Harris, the veteran founder of Carpetright, described conditions for retailers as the worst he has seen for 50 years.

Supermarkets only this month launched a price war across their most basic foodstuffs while latest figures from market research group TNS show cut-price grocers Aldi and Lidl capturing market share from larger, better-known rivals.

City analysts have been slicing their profit forecasts in an attempt to keep pace with the slide in consumer confidence. In the past 12 months, the FTSE 100 has fallen 17% but the general retail sector is down 48% and food and drug retailers - until today thought to be less vulnerable - 20%.

City expectations for this year's profits from some of the biggest stores have been chopped by as much as 30% in the last 12 months.

Worst hit have been the electrical retailers DSG International and Kesa, whose numbers have been cut by 60% and 28% respectively. M&S itself has been downgraded by 27%, Kingfisher 24% and Next 20%. Only Tesco has escaped profit downgrades, while expectations on Sainsbury are a mere 6% lower.

Big-ticket items like fridges, freezers, sofas and beds have been the first casualties of the consumer version of the credit crunch. Furniture retailers SCS Upholstery and Land of Leather have both been forced to seek bailout financing.

Only online retailers such as Asos, N Brown and, to an extent HMV, appear to have escaped the worst of the downturn so far.