Annual retail sales continued to fall in September, slipping 10 per cent compared to the same month a year earlier, but rose 2.1 per cent month-on-month.
The latest data from the Central Statistics Office showed that both value and volume of sales during the month slipped.
Excluding the motor trade, sales volume fell 6.0 per cent compared to September 2008 and grew by 1.5 per cent on a monthly basis.
The most significant declines were seen in the motor trade, which fell 29.3 per cent, and household equipment, which recorded a decline of 13.1 per cent compared with the same period in 2008.
Sales at bars were down 10 per cent for the year, while clothing and footwear declined 5.9 per cent.
On a value basis, retail sales showed a fall of 14.8 per cent year on year. Compared with August, however, sales value rose 1.1 per cent.
The latest fall follows a 9 per cent drop in annual sales in August.
In the third quarter of the year, sales volume fell 11.0 compared with the same three months a year earlier. When the motor trade was taken out of the figures, that decline narrowed to 5.7 per cent. Volume rose 3.4 per cent compared to the second quarter of 2009.
Bloxham economist Alan McQuaid said the figures showed new car sales had been particularly hard hit by the downturn.
"The decline in consumer expenditure since the beginning of 2008 has been driven by a combination of a fall in disposable income arising from a drop in employment income, and a rise in incomes taxes and levies. In addition, the erosion of personal wealth due to declining asset prices, together with increased uncertainty as reflected in the indicators of consumer confidence, has prompted an increase in precautionary saving by households. However, consumer confidence hit an 18-month high in October and hopefully this will be reflected in increased personal spending in the coming months," he wrote in a note.
However, he said the outlook for 2010 would depend on further fiscal corrective measures in December's Budget, and warned an increase in income tax or Vat would have a negative impact on the prospect for retail spending next year.
Davy Stockbrokers said consumer spending was likely to grow again in 2010.
"We think a definitive bottom will be reached when the value of sales grows steadily. For now, many bigger retailers are still comfortably eating into margins that were wide heading into the recession," analyst Rossa White wrote in a note.
"We expect that consumer spending will grow again in 2010, by 1.5 per cent on average in volume. That will hide the intra-year trend, where spending will gradually strengthen heading into the second half of the next year.
"The savings ratio has probably peaked already at about 12 per cent (having jumped 10 percentage points in 18 months). It may ease back towards 10 per cent over the next 18 months as confidence gradually recovers."
The latest review of the retail sector by Retail Excellence Ireland (REI), published last month, indicated that the rate of of decline in retail sales is levelling off. However, it also found that consumers are spending the least amount per transaction in more than two years at an average of €45.64 in the third quarter, down from €66.74 a year earlier.
