The retail sector enjoyed its largest quarterly bounce since 2007 in the final part of last year, according to new figures from Retail Excellence Ireland (REI).

The lobby group’s latest sales review report, however, indicates the gains were largely at the expense of margins, with retailers engaging in “aggressive discounting activity”.

REI’s quarterly industry sales review collates point-of-sale data from 4,500 retailers via market research firm GfK.

It found sales rose 4.22 per cent between October and December compared with the final quarter of 2013. Jewellery was the outstanding performer, recording a 14.9 per cent increase.

The worst sectors were photography/camera and pharmacy.

"While the quarter proved productive, it is important to note that much of the sales gains were at the cost of margin, with November and specifically Black Friday witnessing aggressive discounting activity," Retail Excellence Ireland's deputy chief executive Seán Murphy said.