Despite the slight optimism from retailers prior to the Christmas sales, the results for December has unfortunately fallen short.

The latest Australian Bureau of Statistics (ABS) Retail Trade figures show that Australian retail turnover fell 0.2 per cent in December 2012, seasonally adjusted, following a fall of 0.2 per cent in November 2012.

Australian National Retailers Association (ANRA) CEO Margy Osmond said retailers have had their Christmas hopes crushed.

“The ghost of Christmas past continues to haunt the retail sector, with the continuing trend of 2 per cent plus growth – a third of the long term year-on-year growth of 6 per cent.”

The largest contributor to the fall was other retailing (-2.8 per cent) followed by cafes, restaurants and takeaway food services (-1.1 per cent) and food retailing (-0.1 per cent).

These falls were partially offset by rises in clothing, footwear and personal accessory retailing (2.1 per cent), household goods retailing (0.8 per cent), and department stores (0.8 per cent).

Over the longer term, the weakest performing industries were household goods retailing (down 0.4 per cent in trend terms) and other retailing (down 0.5 per cent in trend terms).

Osmond said the poor result strengthens retailers’ calls for the government to take action on the low value threshold for imported goods, which has encouraged many Australians to shop overseas.

“Competition is clearly working as sales volumes continue to grow, but prices have remained flat. In November discretionary retailers felt the pain as Aussies shopped overseas for Christmas gifts. Once that option was closed off because of delivery times – department stores, clothing, footwear and accessory retailers and household goods retailers returned to favour,” she said.

“We estimated about 8% of Christmas sales were lost to overseas competitors in the later stages of 2012. Looking at these numbers, we might have to revise that number up. Retailers have come out fighting with greatly decreased prices and consumers are buying – but margins remain tightly squeezed.

“With three years of low growth the retail sector is now at tipping point. There needs to be action at a Federal level to address the issues of the sector that employs 1.2million Australians or we will see more closures and more job losses in 2013."