Official figures show that a slowdown in consumer spending continued in June, with the volume of retail sales down 5.2% compared with the same month last year.
The Central Statistics Office said sales fell by 0.7% compared with May, a smaller monthly drop than in recent months.
The CSO said the falls would have been bigger if motor sales had been excluded. Motor sales, which include forecourt and repairs as well as cars, dropped 3.3% in the month.
The figures represent yet another indicator of an economy in the doldrums. With far fewer houses being built and fitted out, sales of furniture and lighting were down a whopping 18.7% compared with June last year.
Sales of electrical goods - as well as hardware, paints and glass - have also been badly hit with volumes down by more than 10%.
Car sales have also been badly affected by the downturn with motor trade activity running more than 14% lower than last year's levels.
Publicans are also feeling the pinch with bar sales down almost 6% as consumers continue to trim their spending habits.
The contraction in retail sales is having a huge effect on the Government's budget because it means far less is collected in VAT. VAT receipts for July, which reflect retail sales in May and June, came in a whopping €460m lower than expected.
So far this year the Government has collected €1.1 billion less in VAT than expected at Budget time. Ireland is one of only three countries in the euro area where retail sales have contracted. The other two are Italy and Spain.
