Marks & Spencer said yesterday that steps to resolve last year’s “self-inflicted injuries” were paying off with a smaller than expected fall in sales.

Chairman Sir Stuart Rose, who yesterday presented a relatively upbeat trading statement covering the 13 weeks to March 28, admitted the group had made mistakes with its food offering in particular.

But he said actions to cut prices had helped stem the sales decline to 4.2 per cent in the retailer’s fourth quarter compared with a seven per cent fall predicted by analysts.

Sir Stuart gave hope for Britain’s battered high street, saying conditions had stopped deteriorating.

“It’s tough out there, but it hasn’t got any worse,” he said.

“People have to eat and also want to have a bit of fun – they want to be cheered up,” he added.

M&S – often seen as a bellwether for the wider retail sector – saw the decline in like-for-like food sales ease to 3.7 per cent in the 13 weeks to March 28, from a drop of 8.9 per cent the previous quarter.

Promotions such as its Dine in for £10 offer helped, led by recently appointed food director John Dixon, promoted to replace Steven Esom amid last year’s sliding sales.

General merchandise, which includes clothing, also put in a better performance, down 4.8 per cent in the three months.

The stock market liked what it heard and marked M&S’s shares 11 per cent higher at 294.25p by early afternoon.

But the sales cheer is not expected to save M&S from a sharp drop in full-year profits. They are forecast to drop by nearly half to £592?million from more than £1?billion the year before.

M&S has suffered badly as cash-strapped customers have defected to cheaper rivals.

A dire Christmas saw like-for-like sales drop 7.1 per cent in the third quarter, representing its worst trading for almost a decade.

It added to the gloom by announcing 1,200 job cuts under plans to shut 25 Simply Food outlets and two main stores.

Sir Stuart said the redundancies and store closures were “all behind us” and said customers were responding well to actions taken internally.

The group has seen its second quarter of slightly better news on food sales as the firm cuts prices to draw in shoppers.

While food price inflation has returned in the wider retail sector, M&S said its prices across the board were down around 1.3 per cent.

Sales of the group’s Wise Buys range has soared by 50 per cent year-on-year and now accounts for 15 per cent of food revenues, according to the chain.

And M&S stressed sales were also impacted by the timing of this year’s later Easter and would have been 0.7 per cent better off with that taken into account.

Younger customers have been attracted back to the shops, with nearly 250,000 more customers under the age of 35 in the fourth quarter, according to M&S.

Young mums in particular were helping boost sales of children’s clothing, while womenswear was also selling well, thanks in part to the recent launch of the new Portfolio range.

But its lower pricing is set to cost the group, with annual UK profit margins expected to be about 75 per cent lower than the previous year. Its sliding profits and sales pain has put Sir Stuart under pressure in recent months, as has increasing concern over his dual role at the group.

Yesterday he brushed aside mounting calls for M&S to appoint an independent chairman as “no new news”.

“Our position was made very clear last year and in the meantime my number one priority ... is to concentrate on running Marks & Spencer and giving customers what they want,” he said.