Marks & Spencer is slashing more than 1,200 jobs and closing 27 stores after reporting a drop in sales.

The store said like-for-like sales fell 7.1 per cent in the 13 weeks to December 27.

It is the biggest drop since 1999 and came despite heavy price cutting in the run-up to Christmas.

The company - which employs around 70,000 staff in the UK - said up to 780 jobs will go with the store closures and up to 450 more will go from its head office.

Of the stores to close, 25 are under-performing Simply Food outlets, and two are small main chain stores selling both food and clothes.

The cost-saving drive also involves changes to M&S's final salary pension scheme - by capping employees' annual increases in pensionable pay - and altering early retirement benefits for those who joined the scheme before 1996. M&S hopes to cut costs by up to £200 million through the moves.

Executive chairman Sir Stuart Rose said: "We are aware that the proposed changes set out above will be difficult for those members of staff impacted, but, given that we expect challenging economic conditions to continue for at least the next 12 months, we believe we are taking the right action to maintain the strength of our business."

Union leaders expressed shock at the scale of the job cuts and called for urgent talks with M&S to discuss the redundancies.

John Gorle, national officer of Usdaw, said: "We want to talk to the company to get an understanding of the business case that has underpinned this decision.

"We are shocked at the severity of the cuts and we were not anticipating store closures. Our members will now be extremely worried.

"The company does not formally recognise trade unions but I hope they will meet with us to have a meaningful dialogue."

The stores due to close are:

Simply Food:

Grafton Centre, Cambridge

Bracknell

Torquay

Imperial Wharf

Harbourside Bristol

Newtownards

Trowbridge

Letchworth

Huntingdon

Marlborough

Braintree

Caversham

Balham

Palmers Green

Colmore Row

Evesham

Tewkesbury

Whitley Bay

Newcastle-under-Lyme

Biggin Hill

Sudbury

Ripon

Melton Mowbray

Honiton

Market Harborough

Main stores:

Valley Park Croydon

Woking

© Independent Television News Limited 2009. All rights reserved.