SHARES in Northern Foods Plc, the United Kingdom's largest prepared-meals maker, have been cut to "sell" from "hold" at Dresdner Kleinwort, which cited deteriorating food sales at major customer Marks & Spencer.

"Typically Northern does better than the overall M&S food business given their more favorable mix, but they can't buck forever the overall trends of their largest customer," Dresdner analyst Warren Ackerman said in a report yesterday obtained by Bloomberg News.

The brokerage expects Marks & Spencer food sales at stores open at least a year to fall by 7 percent in the second quarter, accelerating from 4.5 percent in the previous period. This, in turn, will hurt Northern Foods' revenue growth, which they estimate will fall 0.9 percent in the second quarter. Their shares fell 3.5 pence, or 5.2 percent, to 64.5 pence at 8:12am in London trading yesterday.