More than €4 billion was spent in Dublin over the Christmas and January sales period, latest figures produced by the Dublin Chamber of Commerce show.
Released yesterday, the figures account for an 8 per cent increase in sales on the holiday season last year, well ahead of predicted estimates.
Speaking last night to The Irish Times, Mr Aebhric McGibney, spokesman for the Dublin Chamber of Commerce, said: "Before Christmas, we were expecting a growth in the region of 5 per cent, but the figures show consumer spending that exceeded all expectations."
Mr McGibney said the intense competition in the clothing sector in the State impacted significantly on the overall sales figures. "Compared with the rest of Europe, shoppers in Ireland can pick up items of high fashion at prices that are hard to beat elsewhere across the continent," he added.
It has emerged that two-thirds of all shopping activity that occurred over the season took place in the city centre, with the introduction of the Luas lines being credited for the impact.
According to the chamber, the new light rail system, which came on line last summer, has succeeded in bringing consumers back into the city centre.
"Ultimately, we would like to see both Luas lines joined up as soon as possible, as the evidence shows it would be good for business in the city," Mr McGibney said.
The surge in sales is also reflective of strong consumer confidence brought about by virtual full employment. The chamber also said that, in addition to the new Luas lines, Dubliners have considerable choice elsewhere with major retail developments in locations such as Liffey Valley, the Square and Blanchardstown.
The Stephen's Green Shopping Centre said it saw a dramatic rise in the numbers of customers through its doors over the Christmas period, with almost a 15 per cent increase during December.
The centre's spokesman, Mr Dan Boyd, said: "The Luas has had a significant impact on the numbers passing through our doors."
The chamber voiced its concern over the fall off in the drinks industry saying numerous pubs are simply "pricing themselves out of business".
It emerged last week that many pubs in Dublin have been forced to slash prices, in places by as much as a euro a pint, to court lost business.
