Retail sector suffers sales slump
The retail sector has experienced a slump in sales in June - down 5.5% from last year.
New figures from the Central Statistics Office (CSO) also showed month-on-month drops in sales - down 3% from Christmas and 0.7% from May. With motor trade excluded from the figures, the CSO recorded a decline of 1.5% from May and an annual drop of 1.7%.
IBEC retail sector group Retail Ireland said the latest report reflects the difficulties retailers currently face.
Director Stephen Lynam described the "devastation" felt in the sector and said consumers have been forced to stay out of the shops due to VAT hikes.
Mr Lynam said: "Since the Government increased VAT, the downward trend in retail sales has hit with renewed force.
"While the targets for VAT collection may be being met, this is only happening due to higher VAT receipts on utility bills and professional charges - items consumers cannot cut back on."
The figures showed food, drink and tobacco were the hardest hit from May to June - dropping by 9.7%. The hardware, paints and glass sector saw a monthly slump of 4.8% while fuel dropped by 3.9%.
However, electrical sales rose by 2.9%. Mr Lynam said this may be due to consumers preparing for the digital TV switchover and investments in new sets for Euro 2012 and the Olympics.
Business network Chambers Ireland said the Government must take action to support retailers in response to the figures, with chief executive Ian Talbot pointing out that the sector has been one of the worst hit since the onset of the economic downturn.
He said: "While the Government has been announcing a number of supports for business and jobs in general, we need something that will specifically help retailers to turn a corner and thrive once again."