Concern is growing among Irish retailers following a disappointing Christmas period.

IBEC's latest Retail Ireland Monitor shows a downturn in performance during the second half of 2016.

Total sales fell by 0.1% when compared with the festive season the previous year.

The group says softening consumer sentiment and a further move towards online shopping resulted in the weak results for the sector. The exchange rate continues to make cross-border shopping attractive, while online growth for Irish retailers has slowed dramatically as customers opt to shop with British-based online retailers.

Retail Ireland director Thomas Burke says 2016 was a year of two halves:

"In the first half we saw a steady incremental growth over the first six months of the year. But certainly in the second half of the year, growth slowed significantly. There are a number of factors we would put that down to.

"Certainly there has been a softening in consumer sentiment among Irish consumers and they're less likely to spend as freely as they were in the first half of last year.

"The Irish retailers have reacted strongly to that and have put in place some very good value propositions and have reduced prices to react to that," he continued. "And I guess the battle for Irish retailers over the coming months will be to continue to offer Irish consumers the best value for money possible and encourage them to [...] shop locally."

"While domestic retailers are moving quickly to adapt to the new environment, Government must aid them by taking urgent and decisive steps to address the high cost of doing business, particularly labour taxes, insurance, and rates. They need to ensure that domestic retailers are not at a competitive disadvantage to online and other markets."

"The Irish retail sector is going through a period of significant structural change, which has been accelerated by the impact of external political and economic factors. Retail was the last sector of the economy to enter a recovery phase after the downturn and remains well below its pre-crash peak. Retailers require additional support from Government over the coming months to sustain and grow the 275,000 jobs they provide in every city, town and village in the country."

Key retail trends set out in the Retail Ireland Monitor include:

• Online shopping continues to be an increasingly important channel for pharmacies, with later delivery cut off times enabling customers to shop online well into the week before Christmas.

• Overall, Q4 was disappointing for department stores, reflecting the fiercely competitive nature of this category.

• Furniture and home accessories have been one of the best performing retail categories throughout 2016 and this continued in the last quarter of the year. A number of new entrants are set to open their first Irish stores during 2017.

• Computer and electrical stores struggled in Q4 2016. This was the worst performing category during the critical December trading period compared to the other major retail categories.