Marks & Spencer’s shares fell 4.4% as the City digested last week’s second-quarter update.

Although like-for-like sales were better than expected and margin erosion was contained, a rise in operating costs disconcerted some observers.

ING analyst Peter Brockwell stuck to his sell stance. He does not expect double-digit earnings growth until 2013 and said: “At this juncture we prefer to stick with Kingfisher as our preferred UK non-food retail play and Tesco within UK food retail.”

Broker Investec rates M&S hold but said its revised profit forecast of £575m “remains low-range as we believe a competitive and promotional environment will make market share gains very difficult”.

M&S will hold an investor day next Tuesday. UBS analyst Andy Hughes expects the focus to include its internet offering and logistics.