RETAIL SALES fell in August as weak consumer spending continued to drag on the economy.

The latest figures from the Central Statistics Office showed sales declined 3.6 per cent in the year to the end of August 2011 and were 0.4 per cent lower compared with July. Excluding the motor trade, the annual decline deepened to 3.7 per cent and the monthly decrease grew to 0.5 per cent.

Only one category showed a year-on-year gain, with the volume of sales of electrical goods rising 2.1 per cent compared with the same month in 2010.

Books, newspapers and stationery saw sales decline by 13.3 per cent compared to a year earlier, while pharmaceuticals, medical and cosmetic items were 10.4 per cent lower. Furniture and lighting sales fell by 9.5 per cent.

The value of retail sales also fell in August, declining by 3.1 per cent over the year and 0.8 per cent compared with the previous month.

Exclusion of the motor trades saw the decline in value narrowing to 2.8 per cent on a yearly basis. On a monthly basis, that decrease was marginally higher at 0.9 per cent.

“The familiar drags on Irish consumer spending are not going to go away soon, including a weak labour market, fiscal consolidation and deleveraging,” said Goodbody chief economist Dermot O’Leary.

The firm said it was forecasting another fall in consumer spending of 0.8 per cent in 2012, with a 2.3 per cent decline predicted this year. “There is nothing in the latest data that changes our view on this front,” Mr O’Leary said. “Exports will need to continue to be the driver for Irish economic growth in the short-term.”

Ibec group Retail Ireland has called for Government intervention to help the sector.

Watch:Arnotts chief executive Nigel Blow discuss trends and developments in the Irish retail sector on irishtimes.com