The monthly volume of retail sales decreased by 1.7% in January in department stores, bars, and in the motor trade.
If the motor trade is excluded, the volume fell by 1.4%, when compared with Dec 2012, and there was an annual increase of 0.7%.
The CSO confirmed the figures did not include sales from large online international retailers such as Amazon or eBay, but did include online sales from retailers in Ireland.
Conall MacCoille, chief economist at Davy Stockbrokers, said: “This contraction is not a surprise as Budget 2013 tax rises and spending cuts were due to hit household incomes in January.
He said the figures show “that despite more stable labour market conditions, the retail sector will remain under pressure in 2013 as households’ spending power remains weak”.
David Fitzsimons, CEO of Retail Excellence Ireland, said: “It is disappointing to see that the volume and value of retail sales in Ireland continue to decline in 2013, despite December recording like-for-like gains. Retailers were hoping that 2013 would start on a more positive note; however as the CSO figures show — this is not the case.”
Not all sectors showed a decline, with three sectors bucking the downward trend with furniture and lighting up 6.6%, fuel up 1.6%, and non-specialised stores up 0.2%.
However, as further taxes come on-stream during the year, it is expected that the retail trade will continue to suffer.
“The measures directly affecting household incomes in Q1 include changes to PRSI allowances [0.4% of household disposable income] and reductions in social benefits [0.5%],” said Mr MacCoille.
“The property tax worth €250m [0.3% of household disposable income] and €725m of public sector pay cuts [0.9%] will be implemented later in 2013.”
He said the data is “a reminder that household incomes will continue to be affected by the fiscal adjustment, maintaining pressure on the retail sector despite more positive news on the health of the Irish labour market”.
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