Furniture and electrical sales slide

People also drank less in bars last month with bar sales down 2.6% in February compared with the previous month. Retail Excellence Ireland (REI) called on the Government to speedily implement a series of reform measures to allow Irish retailers to adjust their cost base. REI chief executive, David Fitzsimons, said Ireland’s retail industry is in the 38th consecutive month of decline.

"February saw the rate of retail sales decline increase again. One of the leading reasons for this trend is the introduction of the Universal Social Charge. "Reforms, such as banning upwards-only rent reviews and modernising the industry wage-setting mechanisms, will be crucial if large sections of Ireland’s retail industry is to survive.

"With retail sales continuing to fall, retailers must be facilitated in adjusting their cost base to the hugely changed trading environment," said Mr Fitzsimons. Chambers Ireland said that the decrease in the volume of retail sales in February once again highlights the pressures retailers face at this time. Chambers Ireland deputy chief executive Seán Murphy said retailers need costs, such as local government rates and charges, reduced further. "Any cost savings local authorities achieve must be passed back on to hard-pressed retailers in the form of rate reductions now," he said.

Overall the volume of Irish retail sales rose 3.2% in February from the previous month and fell 0.7% from a year earlier. However, excluding car sales, which have been boosted by an extended scrappage scheme, retail sales fell 0.3% on the month and dropped 3.2% compared with a year ago. Last year retail sales rose 1% and economists expect retail sales to grow 1.8% this year, according to the latest Reuters poll.

Chief bond economist with AIB Global Treasury, Oliver Mangan, said the strong February figure reflects good car sales on the month and "... when you strip that out, core retail sales are sluggish enough and have been flat to declining in recent months," he said. Davy economist, Conall Mac Coille, said the outlook for consumer spending remains weak.