Despite the cut in cash rate implemented by the central bank this November, Australian retailers are far from being optimistic as key players reported of discouraging numbers that are at best, descriptive of challenging trading situations.

Even the onset of the Christmas shopping season failed to spur positive outlook in the local retail industry, according to Woolworths chief executive Grant O'Brien, informing the company shareholders that they should expect rough winds to prevail until after the first half of 2012.

"The interest rate reduction was certainly a step in the right direction for consumers' confidence, but there's nothing by way of a strong trend at this particular point in time that would point to that being the single answer to customer confidence," O'Brien said.

"In the short term, the realities and challenges mean we believe trading will remain subdued, most probably through to the next financial year," the Woolworths boss added as he advised investors that the company only expects a maximum of six percent profit growth by te end of the current fiscal year.

Yet he admitted that a more ideal picture may set in if Australia will move to further reduce its policy rates, a scenario that economists said could actually prompt movements in the sector.

Also, a cutback, analysts said would provide a breather to the local market amidst the ongoing struggles seen in the global theatre, mostly highlighted by the financial woes that many European nations face.

The gloomy prospect is not exclusive to Woolworths as David Jones reported on Friday that for the first three months of financial year 2011-2012, it posted sales retreat of up to 12 percent.

David Jones chief executive Paul Zahra said that efforts by the luxury retailer to lure more customers, including high discount offerings, receive lukewarm response, highlighting the industry's weakest performance year over the past five decades.

Other players such as Premier Investments and Funtastics, have also implemented huge price cut backs on their products, according to the BusinessDay, but to no avail.

While the Australian Retailers Association (ARA) is projecting total holiday sales to reach $39.5 billion by the last week of December, the figures, according to ARA executive director Russell Zimmerman, actually represent a decline of two percent from earnings posted last year.

In the process, overall sales in the Department Store sector is expected to dip by 1.5 percent in the same period, Zimmerman said.

Retailers are hoping though, O'Brien said, that the Reserve Bank of Australia (RBA) will heed their calls and opt for another rate reduction on December, and hopefully that act would convince consumers to shop more.