Spanish retail sales fell for the 30th month in a row in December, data showed today, with a hike in sales tax deterring shoppers already suffering from recession and 26 per cent unemployment.

December sales fell by 10.7 per cent year-on-year on a calendar-adjusted basis, the National Statistics Institute said, sharper than November's 7.8 per cent fall.

The government hiked sales tax from September as a way of bringing more revenue into depleted coffers in order to hit strict Europe-imposed deficit targets.

Retail sales in 2012 were down 6.8 per cent on 2011, the data showed.

"The economy slowed down a lot in the last quarter," said Nicolas Lopez, head of analysis at M&G Valores. "The rise in unemployment also reduced income available for families." Unemployment hit 26 per cent for the quarter, the highest level since records were started in the 1970s.

Yesterday, the latest figures from the Central Statistics Office showed a surprise fall in retail sales in Ireland last month, casting fresh doubt on the strength of consumer spending here.

Although some stores reported a last-minute rush prior to Christmas, figures from the CSO showed the volume of retail sales fell by 0.1 per cent in December compared with the previous month.

The figures also indicated sales fell by 1 per cent on an annual basis in December, the largest decline in five months. Total retail sales have now fallen by 25 per cent since the start of the recession.

Reuters