When Marks & Spencer launched what looked like an unplanned 20 per cent off alcohol promotion the weekend before Christmas, it was a sign that the festive build-up wasn’t going to plan.

But, despite the smoke signals coming out of Paddington in December, it still comes as a shock for M&S to report a poor quarter after nearly three years of strong recovery.

Sir Stuart Rose was quick to blame the broader economy, and M&S is certainly not broken. But privately, he would probably acknowledge that there are more specific challenges as well. Starting a recovery is hard, but maintaining it is arguably even harder, as consumers’ expectations grow.

For instance, while Rose may boast that 70 per cent of the estate has now been refurbished, the more recent fit-outs don’t create anything like the excitement of the initial refurbs – something that will be even harder to achieve as pressure on capital expenditure tightens this year.

And then there’s food. In this market, a poor clothing performance is understandable, but a poor food one isn’t. And, while Rose’s argument that cannibalisation from new Simply Food stores hit like-for-likes partly explains the slide, there is a more fundamental issue about its positioning.

With its product and pricing becoming ever-more premium, M&S’s food business has moved away from both its own increasingly value-focused general merchandise business and the rest of the food market. While M&S food has always been a premium offering, it needs to be careful not to lose touch with the price positioning of both the mass food market and the core M&S business.

But, despite the extraordinary share price reaction, the main lesson of the M&S numbers is not about M&S itself. It confirms what Next, DSGi and others have shown in the past week – that consumer confidence has collapsed. While more niche retailers, either at the top or bottom of the market, may be doing OK the mass market is the real market and that is where the pain is being felt.

So forget the hype about online sales, John Lewis and computer games. Yes, there are bright spots, but there always are in bad times. The reality is that even if we have interest rate cuts, this year is going to be tough. If they are delayed, it could be brutal.

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