ANNUAL RETAIL sales declined by 15 per cent in July, but were up by 0.2 per cent on June, according to new figures from the Central Statistics Office (CSO).

The latest data indicate that most retail sectors recorded volume declines over the year, with the biggest falls in the motor trade industry, where sales were down 48.2 per cent, household equipment, clothing, footwear and textiles, non-specialised stores and bars.

The only sector to show a rise in yearly retail sales was department stores, with a 0.2 per cent increase in volumes.

One factor in the annual fall was a sharp rise in new car sales in July 2008 – which coincided with the introduction of the new VRT system – compared with ongoing weakness in car sales during July this year.

The value of retail sales decreased by 19.2 per cent year on year, but rose by 1.6 per cent on a monthly basis.

If motor trade sales are excluded, the annual decrease was 11.8 per cent and the monthly change was -0.7 per cent.

Alan McQuaid, chief economist with Bloxham Stockbrokers, said that while there had been some improvement in personal spending recently, it was more a case of a slowdown in the rate of decline rather than a return to positive growth.

“The extreme weakness in the jobs market has been reflected in very negative sentiment on the part of consumers regarding current economic conditions,” he said.

“Although there has been some improvement in sentiment regarding future prospects, albeit from historically low levels, which may provide some support for consumer demand, it is unlikely to outweigh the effect of the decline in disposable incomes.”

He forecast the decline in personal spending would persist into 2010.

Retail Ireland described the latest figures as “disappointing” and called on the Government to take a proactive response to addressing the difficulties facing the sector.