Annual retail sales fell by 9 per cent in August, according to new figures from the Central Statistics Office (CSO).
On a monthly basis, sales fell 1 per cent compared to July.
Most sectors were hit by falling sales, with the motor trade, bars and household equipment particularly affected by the downturn.
The car trade saw volume fall 29.1 per cent in the year, while the bars sector recorded a 13.1 per cent decline. Household equipment was down 11.4 per cent.
Sales at non-specialised stores fell 3.2 per cent, while clothing, footwear and textiles slipped 3.9 per cent.
The only sector to show an improvement was the pharmaceuticals medical and cosmetic articles sector, which grew 3.3 per cent anually.
When the motor trade was excluded from figures, the volume of retail sales fell 5.2 per cent year on year, while monthly sales dropped 1.8 per cent.
In value terms, sales fell 13.4 per cent compared to August 2008 and declined 1.4 per cent in the month. Excluding the motor trade improved the decline 10.4 per cent annually, with the monthly decrease widening to 1.6 per cent.
Chief economist with Bloxham Stockbrokers, Alan McQuaid, said the figures showed consumer spending remained very weak, hampered by a fall in disposable income, a rise in taxes and levies, although the annual rate of decline had slowed from the previous month.
Households were also being hit by falling asset prices, and many were increasing precautionary savings.
"The overall weakness in retail sales has been best illustrated by the sharp fall in Vat receipts in 2009," he said.
"Things haven't been helped either by the depreciation of sterling versus the euro, which has encouraged many consumers to go to Northern Ireland to do their shopping. Indeed, with sterling set to remain very weak in the short-term, Irish retailers will be under significant pressure to offer sizeable discounts to lure consumers back into the shops in the run-up to the key Christmas season."
Mr McQuaid said the outlook for 2010 would be, in part, dependent on the fiscal measures in the Budget on December 9th.
"Another increase in the tax burden for households would clearly have a negative impact on the prospect for retail spending next year," he said.
He forecast the current decline in personal spending on goods and services would continue into 2010.
Retail Ireland said the figures showed the industry was still under serious pressure, and called for a cut in excise duty and VAT from November 1st to coincide with the Christmas shopping period.
"The value of core retail sales, excluding car, fuel and bar sales, was down 9.7 per cent in August, whereas sales volumes were down 4 per cent, showing how prices have been cut across the board. In other words, consumers got more for their money," said Retail Ireland director Torlach Denihan.
"The continued weakness of sterling poses a major threat to the retail sector in the run up to Christmas. We estimate that cross-border shopping costs the Exchequer €430m and that it is too late to wait until budget day to tackle this."