London: British retailer Marks and Spencer posted a third consecutive rise in underlying quarterly sales, though its rate of improvement slowed a little and it joined rivals in sounding cautious about the consumer outlook.

Britain’s biggest clothing retailer, which also sells food and homewares, said on Wednesday sales at British stores open at least a year rose 3.6% in the 13 weeks to 3 July, its first quarter.

That was toward the top end of forecasts and boosted by a strong performance in clothing, though it was down from a 5.1% rise in the previous quarter.

Britain’s retailers are concerned that higher taxes and public spending cuts aimed at slashing record government borrowing -- as announced in an emergency budget on 22 June -- might hit consumer spending in the months ahead.

“We have made a good start to the financial year, but following the recent budget and the actions proposed to reduce the national deficit, including the increase in VAT (sales tax), we are cautious about the outlook," M&S chief executive Marc Bolland said.

M&S, which serves 21 million Britons a week from over 650 stores and also has about 300 shops abroad, was hit hard in the recession, particularly in its upmarket food business.

It has fought back with lower-priced “Wise Buys" in food, new clothing ranges like “Indigo", and a revamped online offer.

Like-for-like general merchandise sales, which include clothing and homewares, were up 6% in the first quarter, while food sales were up 1.5% on the same basis.

That was excluding a benefit from the timing of Easter, which would add about 0.4% and 1.4% to the figures respectively, M&S said.

International sales were up 0.9%, while sales at the M&S direct Internet business leapt 49%.