Like for like sales, which exclude new stores were up 0.9% last year.
Total food sales rose 1.8% while like for likes rose 0.3% – the retailer’s first positive like for like growth for two years.
M&S says it increased promotional activity throughout the year including extending its Dine In promotions to include everyday meal combinations and special occasion promotions.
However, despite an overhaul of marketing strategy in March and high profile advertising campaigns starring Dannii Minogue, M&S says marketing spend was 3.5% down on the previous year to £122.9m, due to a reduced number of external marketing campaigns.
General merchandise sales, which include clothing, rose 4% overall with like for likes up 1.6%.
Group sales grew 3.2% to £9.3bn during the year.
Sir Stuart Rose, M&S chairman, says: “Marks & Spencer has had a good year. We have improved performance in all core areas, demonstrating the resilience of the M&S brand.
He adds that the chain has had a “satisfactory” start to the year and believes the “worst effects of the recession” have passed.
“With strong foundations in place, and our core values intact, I am confident that M&S is well set for growth under Marc Bolland’s direction.”
Marc Bolland joined M&S as chief executive on 1 May. Sir Stuart will become non-executive chairman on 31 July.
The retail chain’s latest advertising campaign stars England footballers Theo Walcott, Emile Heskey, Matthew Upson and Steven Gerrard as well as stars from England’s World Cup 1966 winning team.