Consumers remain confident, but are likely to hold out on spending, the peak body representing Australia's leading retailers says.

The country's consumer shopping mood grew steadily in December despite expected declines due to the Reserve Bank of Australia's (RBA) decision in November to lift its policy rate.

According to the latest Westpac-Melbourne Institute consumer sentiment index released on Wednesday, consumer confidence shored up by 0.2 percent to 111 points in December, coming from the 110.7 points recorded in the previous month.

Australian National Retailer Association (ANRA) chief executive Margy Osmond said retailers will be thrilled if the confident consumer sentiment reported by the Westpac-Melbourne Institute Index of Consumer Sentiment was reflected in Christmas sales this year, but would not be holding their breath.

"We've had these positive economic sign posts all year with little impact on retail sales. After the surprising dip in October retail sales (down 1.1 per cent) the sector will be holding out little hope that the November rate rises did much to improve the retail picture.

"Shoppers are continuing to opt for savings over spending and the survey indicates that 'paying down debt' remains popular as a wise place for savings amongst Australian consumers. Likewise consumers are cautious about getting into debt, or spending beyond their means.

"The survey shows a 7.2 per cent drop in the index measuring consumer's expectations for the economy in the next five years - which tells me they are thinking long term when it comes to the financial picture and are likely to continue in a conservative mode to ensure they are well protected should another economic slump hit the country. That means more money for savings, focusing on keeping debt to a minimum and fewer spending sprees."