Retail Ireland, the IBEC group that represents the retail sector, said today that pre- and post-Christmas sales appear to be up on last year.

However, it warned that retailers remain pessimistic about next year as rents remain too high, local authority charges have risen in many areas and wage costs remain very high compared to European levels.

Retail Ireland's Stephen Lynam said that sales rose in early December, but declined again in the middle of the month. ''Christmas week and the current week appear to be better than last year, but it is likely that total retail sales for the whole of 2011 will end up at around the same as those in 2010,'' he stated.

He also cautioned about comparing this year's Christmas sales with the ''disastrous'' Christmas last year and said that many shoppers this week may be trying to beat the 2% VAT increase which comes into play from January 1.

Mr Lynam said that Retail Ireland's members' mood is grim. ''Consumer sentiment is poor and retail businesses are struggling. Many may close early next year,'' he cautioned.

He urges the Government to review VAT receipts in March and reverse the increase if the expected tax take is not reached. He also wants the Government to tackle the ''black economy'', particularly the illegal sale of cigarettes and fuel.