Retail Ireland has predicted that consumer spending will rise by 1.3% in 2014, the first such increase since the start of the recession.
In its New Year statement, the Ibec group that represents the retail sector said that despite recent positive indications, the sector remains under severe pressure.
But it added that consumers will continue to benefit from low inflation next year, due to intense competition in the sector.
"While forecasted growth of 1.3% is low, it is a move in the right direction. Spending fell in 2012 and was static in 2013," commented Retail Ireland director Stephen Lynam.
"At present, goods inflation is in negative territory as shops battle for footfall. Intense competition in the retail sector is likely to keep prices down in 2014," he added.
Mr Lynam said that the recovery in the retail sector is fragile and Government must ensure that no extra costs or unnecessary regulations are imposed as recovery takes hold.
"Keeping costs under control is essential if we are to create new jobs. Many retailers remain in survival mode and pay expectations need to reflect economic realities," he added.
Last week, industry group Retail Excellence Ireland said that retailers had their busiest day of post-Christmas sales in six years on St Stephen's Day.
The industry group said that amongst retailers that opened on December 26, sales were up 20% when compared to last year.