The volume of retail sales fell in the year to the end of August, declining 0.6 per cent over the 12-month period, the Central Statistics Office said today.
That was the smallest decline so far this year, the figures showed.
The volatile motor trade continued to make an impact. When this was excluded, the annual figures showed a 0.4 per cent rise.
On a monthly basis, sales rose by 0.4 per cent compared with July, and a 0.1 per cent rise when motor trades were excluded.
Over the month, the largest increases were seen in the bar sector, where sales rose 3.2 per cent, with hardware and paints increasing by 2.1 per cent. These gains were balanced out by a 3.5 per cent fall in the furniture and lighting sector, and a 2.3 per cent decline in clothing and footwear sales.
The CSO also revised July's figures, which previously showed a 1.5 per cent decline year-on-year, to a 1.3 per cent fall.
Ibec group Retail Ireland saw some positives in the figures.
"We predicted something of a sales bounce following the positivity that the Irish Olympic and Paralympic teams' outstanding performance in the London Games generated and this has materialised," director Stephen Lynam said.
"The overall trend for the year so far has been poor and turnover is down by a fifth since the onset of the recession. However, the recent improvements in consumer confidence, if maintained, could lead to the start of a better period for retailers."
But Goodbody economist Juliet Tennent said the lack of credit in the markets was contributing to the continuing weakness in retail sales. The ongoing weakness in the labour market was also an issue.
The value of sales rose by 0.3 per cent year on year, and 1.6 per cent when car sales were excluded. Monthly figures showed a rise in value of 0.5 per cent, rising to 0.7 per cent when car sales were discounted.
"Despite the pick-up in consumer confidence in 2012 and the improved spending signs recently, it is hard to see a major upward rise in personal expenditure in the coming months given the current uncertain economic/financial climate," Merrion's Alan McQuaid said. "Heightened uncertainty about the prospects for future incomes are set to persist due to the high level of unemployment, such that consumers are likely to maintain buffers to protect against adverse income shocks."
He warned that things wouldn't get any better in the short term, and with the prospect of austerity measures in December looming.
That opinion was backed up by Davy chief economist Conall MacCoille.
"Overall, our forecast for a 1.7 per cent decline in consumer spending in 2012 looks a little pessimistic given the 1.1 per cent fall in retail sales in the first eight months," he said. "But the broad picture is that falling disposable incomes from tax rises and weak pay growth have pressed down on consumer spending in 2012 as we expected."
The Irish Small & Medium Enterprises Association (Isme) said the deepening recession was due to a lack of Government policies in relation to the retail trade, and said thousands of jobs would continue to be at risk for the forseeable future.
"While the monthly figures show a slight increase, today's figures confirm that retail sales are down almost 25 per cent since 2007, with little sign of improvement and the sector facing annihilation unless the Government recognise the valuable contribution that retail makes to the economy," chief executive mark Fielding said. "The current trend in sales, together with the high costs imposed on retailers is unsustainable, with the resultant closure of shops and subsequent job losses."
