Disappointing retail sales only slightly in December, after the Christmas trading period was impacted by the Queensland floods, economists say.
Retail spending increased 0.2 per cent in December, to a seasonally adjusted $20.358 billion, the Australian Bureau of Statistics said.
Economists had forecast a 0.5 per cent rise for the month.
JP Morgan economist Helen Kevans said flooding in Queensland had seen retail sales decline for the month.
"In December we had the impact of the floods affecting sentiment," she said.
"At the same time, petrol prices were higher. All this impacted on the numbers."
The ABS data showed Queensland retail sales grew by 0.3 per cent in December, compared to a rise of 0.9 per cent in November.
However, Ms Kevans said she did not expect the weaker than anticipated numbers to have a sustained impact on the board of the central bank, which on Friday reiterated its view that the floods would not have a lasting impact on the domestic economy.
"The Reserve Bank of Australia (RBA) was expecting some weakness in these numbers," Ms Kevans said.
The central bank in its quarterly Statement on Monetary Policy last week said it would look beyond the impact of the floods that struck Queensland and parts of NSW and Victoria in December and January.
On Tuesday of the same week, the RBA opted to leave the cash rate steady at 4.75 per cent. CommSec chief economist Craig James said the retail numbers were disappointing yet again.
"All the anecdotes from retailers have proven to be correct - consumers just aren't spending," he said.
"The volumes aren't responding to cheaper prices.
"That's a bit of a wake-up call for retailers.
They can continue to cut prices, but it's no guarantee that consumers are going to frequent their stores."
Mr James said the low retail figures came at a time when there was full employment and good consumer sentiment.
"You would think in terms of the fundamentals, having a job and wages rising, that people will start to spend again," he said. "We've been saying that now for the best part of a year but it's still not happening.
"Certainly the job market is in good shape and consumer sentiment isn't bad as well."
Mr James said there is no reason for the RBA to raise the cash rate at the present time.
"I think if the Reserve Bank can stay on the interest rate sidelines, people may start to get a bit more confident again and start to spend."
ICAP senior economist Adam Carr said underlying retail sales were still strong.
"The headline retail print seems to suggest sales were sluggish again, although when you look at the detail this isn't the case," Mr Carr said.
"Excluding food, sales rose 0.6 per cent in the month of December, following a 0.7 per cent rise in November.
"This clearly shows underlying spending wasn't too bad, indeed it shows that discretionary spending is holding up quite well," he said.
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