Retail sales fell back in May, according to the latest figures, which show a 2.3 per cent monthly decrease in sales volumes. It is the second successive monthly decline following a big increase in sales in March.

Despite the decline in the past two months, the volume of sales - the best measure as it excludes the impact of inflation - continues to run ahead of the same period last year. The latest figures, published yesterday by the Central Statistics Office, show sales volumes running 5.4 per cent ahead of May 2003.

The latest figures were heavily influenced by a decline in car sales in May. When these are excluded, the figures show a smaller decline of 0.6 per cent in May. All the figures are adjusted for normal seasonal trends.

In a comment on the figures, Davy Stockbrokers speculated that higher fuel prices may well be having an impact on car sales. Looking at the overall figures, it says that another monthly decline in June could move sales back to 2003 levels when annual comparisons are made.