New figures from the Central Statistics Office show that the volume of retail sales fell by 1.7% in January compared to December. There was a yearly decrease of 1.2%.

When motor sales are excluded, the volume of retail sales fell by 1.3% in January from December. But they rose by 0.7% on an annual basis.

The CSO said that during the month, sales at department stores slumped by over 15%, while bar sales fell 8.1%. 

Sales of cars slowed by 3.6% last month as the changeover to the new car registration system had a negative impact on what is traditionally the best month of the year for the motor industry.

The sector which saw the biggest increase in sales in January was the furniture and lighting sector, which rose by 6.6%.

Sales of fuel increased by 1.6% while sales at non-specialised stores inched 0.2% higher.

Retail Excellence Ireland's David Fitzsimons said he was disappointed with today's figures, which showed falls in both the volume and value of retail sales.

''The Government must take note and implement practical measures to aid our struggling retail industry. Over the past few weeks, we have seen businesses fail and many jobs lost, the sector still remains very fragile and this Government needs to tackle this before we see further failure in the coming months,'' he urged.

Commenting on today's figures, Davy chief economist Conall MacCoille said the fall was not a surprise as Budget 2013 tax rises and spending cuts hit household incomes in January.

''Today's data highlight that despite more stable labour market conditions, the retail sector will remain under pressure in 2013 as households' spending power remains weak,'' he added.

Merrion economist Alan McQuaid said that the January data are a clear indication that consumers still remain very cautious.

''It is hard to see a major upward rise in consumer expenditure in the coming months given the ongoing uncertain economic and financial climate. We remain concerned that the introduction of a property tax together, with the still high level of unemployment, will impact negatively on overall retail sales this year,'' he added.