Marks and Spencer will continue to push its credentials as a "quality foods" retailer, its executive chairman said today (4 November), despite the company seeing the weak UK economy hit its food sales.

The company saw UK like-for-like food sales drop 5.3% during the six months to 27 September amid what M&S boss Sir Stuart Rose termed "an aggressive price war" in the country's grocery sector.

Sir Stuart said M&S had looked to meet demand for more value, through initiatives including its 'Dine in for GBP10' offer and its 'Wise Buys' range of lower-priced staples, including milk, and bread.

Such moves had helped M&S stem the decline in its share of the UK food market on a year-to-year basis from July, Sir Stuart said.

However, he insisted the company's position as one of the UK's more upmarket food retailers would not be compromised.

"M&S has always traded on quality and value and on price and that where we intend and continue to be," Sir Stuart told analysts this morning. "You've got to work with what you've got, be proud of what you've got and leverage what you've got. If we've had a food business that has been able to leverage itself in the market for 50 years based on a quality stance, that's what we intend to continue to do."

Nevertheless, Sir Stuart pointed out that M&S was competing effectively on price in the current economic environment. "We're now cheaper than Waitrose and we're on a par with Sainsbury's on some prices," he later told reporters.

However, the pricing initiatives have put pressure on margins and, in a bid to keep a lid on costs, M&S has earmarked less spending for capital projects, a move that will slow the expansion of the company's Simply Food convenience store network, it admitted.

Shares in M&S finished the day up 17p, reaching 238.50p at the close of trading on the London Stock Exchange.

Earlier in the day, the retailer had reported a 34% fall in underlying pre-tax profits to GBP297.8m (US$475.4m) for the six months to 27 September.

Underlying operating profit fell 23.7% to GBP372.4m.

The fall in profits came as M&S saw group revenue inch up 0.8% to GBP4.2bn but its like-for-like sales in the UK drop 5.7%.