* Clothing & home, food sales fall in Christmas quarter
* Sales declines not as bad as analysts' forecast
* Poor October dented overall quarter's performance
* M&S shares fall by as much as 6 percent (Releads, adds detail, CEO, analyst comment, updates share price)
LONDON, Jan 11 (Reuters) - Sales of Marks & Spencer clothes and food fell in the last quarter of 2017, denting the British retailer's latest attempt at a corporate turnaround and knocking its shares.
Once a British institution, M&S is facing fierce competition online and on the high street, with its efforts to revitalize its 134-year-old business hampered by a squeeze on consumer spending as inflation rises in Britain and wage growth falters.
By contrast, British online fashion retailer Boohoo.com raised its full-year sales forecast after more than doubling its revenue over the same period to the end of December, with strong Black Friday sales.
Shares in M&S, which rallied in the week before its Christmas update, fell as much as 6 percent on Thursday after it said sales of clothing, domestic products and food had all fallen, albeit not by as much as most analysts had forecast.
"We had a mixed quarter that started off with a challenging October but got better on both sides of the business in the run-up to Christmas," M&S Chief Executive Steve Rowe said, adding that it "had a lot to do" to get its food business on track.
Although Next, a rival in clothing, also reported better-than-expected Christmas sales last week, M&S is not the only British retailer to have struggled in the crucial period.
British department store John Lewis said on Thursday that its own trading was likely to remain volatile in 2018 after higher costs and tough competition blunted the benefits of solid Christmas sales.
And Tesco, Britain's biggest retailer, missed forecasts for Christmas trading.
M&S re-set its strategy in November two months after retail veteran Archie Norman joined as chairman, saying it would speed up store closures and relocations and re-position its food offer, including slowing down openings of its 'Simply Food' convenience stores.
ONLINE GROWTH SLOWS
On Thursday, M&S said same store food sales fell 0.4 percent. While this was better than analysts' average forecast of a 1.1 percent decline, it was worse than a 0.1 percent fall in the previous quarter.
M&S said like-for-like sales of clothing and homeware fell by 2.8 percent in its fiscal third quarter, which was ahead of analysts' average forecast of a 3.4 percent decline. The fall in the second quarter was 0.1 percent.
"While we expect 2018 to finally see some genuine signs of a turnaround in M&Ss womenswear business, the trading over Christmas was disappointing," Bryan Roberts, global insight director at TCC Global, said.
"A last-minute rush proved too little, too late to rescue the overall period," Roberts added.
Rowe said M&S's clothing and homeware revenue grew both in-store and online over the weeks leading up to Christmas, and the retailer held its full prices when others were cutting theirs.
But an unseasonably mild October had resulted in an overall revenue decline for the quarter, while online sales also suffered, with growth slowing to 3 percent, from 6 percent in the previous quarter.
Despite the sales disappointment M&S said it would maintain its financial guidance for the full 2017-18 year.
Prior to Thursday's update, analysts were on average forecasting a pretax profit before one-off items of 578 million pounds, down from 614 million pounds M&S made in 2016-17. Such an outcome would be a second straight year of decline. ($1 = 0.7420 pounds)
(Editing by Kate Holton/Guy Faulconbridge/Alexander Smith)