Official figures show that consumer spending continued its weak start to 2012 in February.
The Central Statistics Office said the volume of retail sales fell by 0.3% from January, the second monthly drop in a row.
This meant the volume of sales was 1.9% lower compared with a year earlier.
Excluding motor sales, there was a 1% monthly fall and a 2.1% annual drop.
Many economists prefer to focus on these figures as there have been big swings in motor sales over the past two years.
A breakdown showed that motor sales were down 2.9% during February, while bar sales dropped 3.3%. There were also big falls in furniture sales (2.2%) and the books, newspapers and stationery category (3.2%). Sales at department stores rose by 8.5%, however, and electrical goods sales were up 6.3%.
The value of sales, which takes prices into account, fell by 0.1% during February, giving a 1.8% annual drop.
Call for Government to look again at VAT
IBEC group Retail Ireland described the figures as the continuation of the "dismal start" to 2012, adding that falls of this size had not been seen since 2009. It said the Government would have to look again at the decision to increase the top rate of VAT if this trend continued.
Davy economist Conall Mac Coille said the figures confirmed that a pick-up in spending at the end of 2011 was temporary, as households are likely to have brought spending forward ahead of the VAT rise in January.
Bloxham's Alan McQuaid also said the figures were no great surprise, as households remained under pressure. "Overall, there is little to be optimistic about as regards the Irish consumer or personal spending in the immediate future," he said.
The continued fall in retail sales seen during February requires urgent Government action according to Retail Excellence Ireland.
“Sectors that remain under extreme pressure include consumer electronics, mid-market fashion and flooring,'' commented Retail Excellence Ireland's chief executive David Fitzsimons.
He said that the retail sector suffered as a result of St. Patrick’s Day falling on a Saturday this year. ''Many of the large parades undermined trading for retailers over the weekend. This also resulted in weakened consumer purchasing for Mother’s Day,” he added.
Dublin seeing footfall growth for first time since 2006
But the Dublin City Business Improvement District (BID) today said that it had evidence to show that Dublin city centre was beginning to show early signs of a recovery in consumer confidence, despite the CSO's national figures on retail sales.
Figures collated by the body, which represents 2,500 businesses, show that Dublin city centre is now recording consistent footfall growth for the first time since 2006. The BID says there was a footfall increase of 250,000 in the first quarter of 2012 compared with the same period in 2011.
