General merchandise like-for-likes in the UK were down 6.4%.Total group sales were up 0.4% for the period, with total UK sales down 1.6%. Within that, fashion sales dropped 3.5%.
International sales were up 24.2% but UK sales fell 1.6% with general merchandise down 2.9%. Online sales rose 34%
Chairman Sir Stuart Rose said that he expected UK gross margin to fall 100 basis points, following a more promotional stance at the business. He added that the business was cutting costs and would decrease capital expenditure this year.
Rose said Marks & Spencer expected operating cost growth for the year of 4-5% compared to previous guidance to 7%. Capital expenditure would be around £700m compared to previous guidance of £800-£900m.
For 2009/2010 he expected to spend around £400m with the focus of spend being on supply chain and information technology systems.
Rose said that UK sales remained relatively steady quarter on quarter, despite the difficult environment.
He said: "Consumer confidence remains fragile and the retail environment unpredictable. Consumers are increasingly cautious about their budgets. We have responded by offering our customers better values and more promotions across the business, while at the same time tightly controlling our costs."
"Our investment to improve values along with a more promotional stance has more than offset improvements in bought-in margins. As a result we are currently expecting a reduction of around 100 basis points in the UK gross margin for the full year, although this will depend on market conditions and our trading stance."
The company will report interim results on November 4 2008.