M&S risks war with Daily Mail by pulling its advertising

Marks & Spencer has risked jeopardising its recovery by withdrawing all of its advertising from the Daily Mail and its sister titles in an attempt to punish the newspaper for a misleading article.

The retailer, which is in the middle of its biggest marketing drive for years, pulled all of its adverts from Associated Newspapers' four main titles, including the Evening Standard and Metro. The move was sparked by an article last November in the Mail on Sunday , which claimed the group's new management team, led by Stuart Rose, wanted to sell up to half of its Simply Food convenience store chain.

The company denied the report, which suggested it would have to write off millions of pounds on any deal. But it is understood to have been unhappy with the correction. Industry observers said M&S took a big gamble in opting to withdraw its advertisements from the Associated titles, which are read by the core clientele it needs to lure back. It withdrew the ads in January, missing out on the chance to reach up to five million readers.

After a dire Christmas, M&S was forced to bring forward its January trading statement and issue a profit warning. Mr Rose is under increasing pressure to halt the group's deteriorating performance, which saw its like-for-like sales sink 5.6 per cent in the six weeks to 1 January. Underlying sales across the group have fallen for five straight quarters.

It is not the first time that a company has sought to punish a newspaper for adverse copy by pulling its advertising. Two years ago, MG Rover dropped its advertising from all the Express Newspaper titles after a disagreement over editorial.

Businesses also sometimes punish newspapers for their political views. Jardine Matheson, the conglomerate, withdrewadvertising from the Financial Times for a year after it endorsed the Labour Party in 1992.

M&S and Associated declined to comment yesterday.

Insiders at Associated said the stand-off was unlikely to last long. Although M&S is a significant source of advertising revenues, it is not among the Daily Mail's biggest retail clients. The newspaper relies most heavily on Dixons, whose Linda Barker-fronted campaigns often take up an entire double-page spread.