Marks & Spencer (M&S) has this morning reported a fall in pre-tax profit for the six months to 1 October, despite a string performance from its food division, as high street competition hit the group’s margins. The company, which is a bellwether for the UK’s retail sector, saw its half-year underlying pre-tax profit fall from £348.6m in 2010 to £320.5m. Like-for-like sales for the period were up slightly, 0.5%, driven by a 2.1% rise in food sales, which offset a 1.3% decline in general merchandise sales. The group said that its total UK sales excluding VAT rose 1.6% for the six months, with general merchandise sales down 0.8% and food sales up 3.9%. Group sales excluding VAT increased 2.4% to £4.7bn. The company said it held its food market share at 3.6% despite lower space growth and lower price inflation relative to the market. The group said it had taken an 80-basis-point margin hit on its general merchandise business in order to “absorb some of the rising commodity costs and remain competitive”. It said that the second half of the year had started in line with its expectations, but remained cautious about the outlook. Marc Bolland, chief executive, said: “M&S performed well in the first half. Sales were ahead of last year despite tough comparatives and a challenging economic environment. Our food business in particular performed strongly. In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices. “Against a challenging consumer backdrop, we took decisive action to manage the business through the short term while continuing our focus on investing in creating a stronger platform for future growth. We have a very exciting Christmas product offer for our customers with more innovation and choice than ever before.” M&S is to become the latest company to try and muscle in on the high street grab-and-go market with the opening of its first standalone Food on the Move site later this week in London’s Baker Street.