RETAIL SALES volumes declined 17.9 per cent in the year to March, according to the Central Statistics Office (CSO).

Car sales showed a marginal increase in March, rising 8 per cent on sales for February although they remain down 46 per cent compared with the same month last year. If these are excluded, the annual decline was 8.2 per cent and the monthly change was a fall of 2.2 per cent.

Over the first quarter, the volume of retail sales dropped 21.6 per cent compared with the same period last year, although this drops to 7.8 per cent if car sales are excluded. According to the CSO, these are the largest quarterly changes on record.

Alan McQuaid, chief economist with Bloxhams stockbrokers, said while retail sales remained on a downward trend, there was evidence the worst may be over. He said high street spending has been holding up reasonably well.

“Price reductions have kept core retail sales solid in recent months, so while core sales were down in March, persistent deflation should boost sales going forward. Furthermore, with supermarkets now engaged in price wars and retailers starting to pass on the cost benefits from sterling’s weakness, this trend looks set to continue over the coming months,” he said.

Mr McQuaid said pharmaceuticals and medical supplies were the only retail business sector that grew in volume terms in 2008.

The fallout of the property market collapse has led to sales of furniture and lighting falling in recent months.

Pub sales too improved in March, rising 2 per cent, although they remain down 9.4 per cent in volume terms over the year.