AN Olympic feel-good factor has encouraged consumers to loosen their purse strings and spend more money.
As the country basked in the success of Katie Taylor and our other medal-winning athletes, bar sales rose by over 3pc last month, while sales of electrical goods such as televisions enjoyed a similar boost.
This led to overall retail spending rising by 0.5pc in the month, while the volume of purchases increased by 0.4pc.
And while retail sales are still 0.6pc lower than they were a year ago, this annual rate of decline is the lowest it's been all year.
Not every sector enjoyed higher sales, however, as people bought less furniture, clothes and fuel, the Central Statistics Office figures show.
Irish retail sales are now performing better than the average across Europe where they've gone into a slight decline, the figures show.
Electrical goods have enjoyed the fastest growth over the last year, with the sector up 13pc this summer, compared with a year earlier.
The car industry saw a 13pc annual drop in sales as motorists avoided trading up now that there's no longer a scrappage incentive to do so.
The DIY industry enjoyed 2pc growth last month, although spending is still 4.9pc down on last year.
Retail Ireland director Stephen Lynam attributed the general improvement in spending in August to increased consumer confidence.
"We predicted something of a sales bounce following the positivity that the Irish Olympic and Paralympic teams' outstanding performance in the London Games generated, and this has materialised," he said.
If confidence remained higher it would help retailers, but this could be easily damaged by uncertainty about the upcoming Budget, he said.
Consumer spending is set to bounce back in the third quarter of the year after strong sales in July and August, though total spending for 2012 is still likely to be lower than last year, said Davy stockbrokers.
But thousands of jobs are still at risk in retail and the sector is facing annihilation as it is forced to discount prices unsustainably, the Irish Small and Medium Enterprises Association warned.
It warned that the improved monthly figures were just a blip as the retail sector was down 25pc in the last five years.
"The sector is facing annihilation unless the Government recognises the valuable contribution that retail makes to the economy," said ISME chief executive Mark Fielding.