Weakening performance among Australians businesses compared to 2012 is impacting business confidence.
Australian businesses anticipate modest sales activity, difficult trading conditions and subdued consumer activity over the next few months.
The business outlook for 2013 is mixed, with Australian executives indicating that sales, inventories, selling prices and employment will fall but investment and profits will rise.
Despite the Australian Bureau of Statistics' reported slow down in retail spending in July, retailers expect there'll be a surge over the Christmas period.
Despite product price inflation softened, retailers remain far more optimistic than any other industry, according to the National Australia Bank June quarterly business survey.
Retailers are bracing for the worst as they lower their earning expectations in anticipation of pessimistic sales for the September quarter.