The retail sector rallied in November with sales up 2.9 per cent by value compared to the same month in the previous year and up 0.1 per cent on the previous month.

Demand for cosmetics and drugs showed the strongest growth (up 10.4 per cent on the year ) but sales in the pub trade are well down, with sales down 7.1 per cent by volume and 1 per cent by value compared to the same month last year, CSO data show.

Department stores recorded a strong winter opening; sales rose 3.2 per cent by value and 4 per cent by volume on an annual basis. But furniture and lighting - a success story of the January sales - fared poorly, falling 11 per cent by volume compared to November 2002.

The public's appetite for clothing and footwear showed no signs of abating; sales climbed 7 per cent by volume.

The motor trade performed better than expected, building sales 1.4 per cent by volume, compared to a 4 per cent year-on-year decline in October.

Commentators said the figures suggested returning consumer confidence. Mr Declan Martin, director of policy at Dublin Chamber of Commerce, said sales had crept upwards in November, ahead of a sharp jump during the January sales.

Retailers were now more optimistic than at any period in the past 12 months, Mr Martin said. More than half (52 per cent) of Dublin Chamber members reported higher turnover in the second half of last year and 71 per cent expected their turnover to increase in 2004, he said.

"These figures are broadly in line with what was expected. Although Christmas sales were generally flat, there was some improvement. This situation got markedly better once the January sales arrived," he said.

Shoppers were increasingly interested in value for money, explaining why particular products significantly outperformed others, said Mr Martin.

A more cautious note was sounded by Mr Robbie Kelleher, head of research at Davy Stockbrokers. Improving retail sales in November were in line with trends of previous years, he said.Spending on non-retail items such as professional services, education, entertainment and communication boosted consumption lines, said Mr Kelleher.

Slumping pub trade reflected a shift towards drinking at home, said Mr Seamus O'Donoghue, vice-president of the Leinster branch of the Vintner's Federation of Ireland. Additional tariffs on spirits, introduced in the 2002 budget, may also have contributed to the decline, he said.