Australians are keeping their hands on their pockets to shop less and save more, which mean that retailers could not expect windfalls even on the usual peak mode of the Christmas shopping season.

As shown in the latest holiday retail sales forecast of Access Economic released on Monday, expected sales growth for the normally frantic shopping season would only achieve a maximum of three percent as against to figures posted in December 2009, which is within inflation guidance.

Most likely, many shoppers were scared away by the spectre of more rate hikes following the decision of the Reserve Bank of Australia (RBA) in November to push for an increase in the country's cash rate, according to Access Economics director David Rumbens.

With that kind of environment hounding much of the country's business community, Australian consumers are finding it hard to part ways with their hard-earned money as Rumbens stressed that "people just haven't been willing to spend as much as they have been in the past."

He clarified though that despite the prevailing cautious mentality of most shoppers, Australia's underlying income growth returned respectable figures yet even when flushed with more disposable cash, he said that people now tend to save more as compared to last year.

Access Economics said that retail numbers registered in October showed that sales plummeted by 1.1 percent when pitted to sales figures recorded from 12 months before, which effectively cancelled out the sector's growth at the start of 2010's third quarter.

Rumbens said that not much should be expected from the November sales numbers, which he said has been negatively impacted by the November rate movement and while official figures have yet to be released, he stressed that "retail going into the Christmas is still really very weak."

From indicators so far appraised by Access Economics, the retail sector's food and clothing segments were the most hard-hit as federal interventions drew to a halt while consumers gravitated towards service-oriented retailers.

However, the slump, according to Rumbens, should fade away by the start of 2011 as more employments generated in the current year are expected to fuel growth in the economy, which should directly benefit the retail industry.

Access Economics said that rising income should encourage more buying confidence in the first quarter of 2011 and by the second half, retails sales would improve by at least 3.2 percent and en route to a further growth of 4.1 percent in 2012, which should be mostly driven by Australia's ramp up housing construction activities at around that time.