Marks & Spencer shares fell sharply after its Christmas sales were dented by rivals’ discounts as well as its own buying mistakes after it stocked up on too many men’s skinny jeans and mince pies.

A pickup in trade in M&S food halls over the holiday period helped the high street retailer deliver its first positive quarterly sales in three years but the success of its resurgent food division was overshadowed by higher levels of waste, which eroded profitability.

The chief executive, Steve Rowe, said its clothing division had faced a challenging trading environment in the lead-up to Christmas: “There was unprecedented discounting by competitors between Black Friday and Christmas and that made December a challenging month and affected our gifting sales.”

Clothing sales at M&S stores open for more than one year were down 1.7% after an attempt to make its menswear ranges more fashionable backfired. The revamp – after customers last year told M&S its menswear lines were “too old” – involved more than doubling the number of slim and skinny fit trousers it sold while dramatically reducing the choice of classic styles, which promptly sold out in larger sizes.

“We got the balance wrong between the more contemporary merchandise and our more classic fit and that is something that we are correcting for spring,” said Rowe.

He also said there was evidence that UK consumers were thinking more carefully about their purchases – even at Christmas – buying fewer, higher quality items. Demand for the retailer’s women’s and men’s cashmere jumpers was up 15% and 40%, respectively.

“People are buying into higher value products and experiential things,” he continued. “We sold more cashmere than ever before which could be a symbol of people moving away from lower priced goods into something that has got longevity and value.”

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By comparison, sales in its food halls were up 1.4% as shoppers responded to new ranges and lower prices. Sales rose 4% over the all-important holiday fortnight but the retailer bought too much of seasonal lines such as mince pies, leading to waste – although the surplus was diverted to local charities, including food banks, through its partnership with the Neighbourly app.

The food business’s stock issues affected the retailer’s profit margins, which it said would now be at the bottom end of analysts’ expectations. M&S shares, which were relegated from the FTSE 100 index last year, closed down 11% at 194.4p.

The GlobalData analyst Kate Ormrod said it was clear M&S “remains unable to excite shoppers enough to buy”. She added: “Calling out competitor discounting in December as a reason for underperformance is somewhat feeble given how predictable stronger promotional activity was after such a challenging 2019.”

There were “silver linings” within the results, she said, highlighting the good performance from food, which helped nudge underlying UK sales for the group into positive territory – up 0.2% in the three months to 28 December.

Clive Black, an analyst at M&S’s house broker Shore Capital, said: “M&S is maybe entering one step forward, one step back territory, which is much better than one step forward, three steps back of old. If so, brighter times could be ahead, particularly if a more certain and confident UK shopper emerges after the election.”