Official figures that consumer spending fell in July, as the car scrappage scheme came to an end.
The volume of retail sales was down by 0.5% from June. But when motor sales are stripped out, sales rose 0.5%, the first such monthly increase since January.
Many economists prefer to watch the figure excluding motor sales, as the scrappage scheme has provided a temporary boost to car sales over the past 18 months.
A breakdown of the July figures showed that motor sales dropped by 8.4% from June as the scrappage scheme ended. Sales of electrical goods fell 6% and department store sales were down 5.3%. But bar sales rose by 3.3% in the month, while fuel sales rose by 1%.
The Central Statistics Office said sales volumes were down 0.6% compared with July last year.
The value of sales - which takes prices into account - fell by 0.4% in the month and by 0.5% over a year.
Davy economist Conall MacCoille said the car scrappage scheme redistributed spending towards vehicle sales in the first half of this year rather than stimulating overall consumer spending. 'As we expected, spending in the broader retail sector has now picked up as motor trades have fallen back,' he said.
Bloxham's Alan McQuaid said consumer sentiment should remain 'fairly weak' over the rest of the year as households continue to struggle with high levels of debt, lower disposable incomes and higher interest rates.
Retail Ireland director Torlach Denihan said the figures showed that the retail sector was still under extreme pressure, though he said the July figures were possibly boosted by increased spending by tourists.
