A report released on Tuesday by Deloitte Access Economics forecasts a bleak year for Australia's retail industry. The study said sharemarket volatility would likely result in the sector turning from bad to worse.

The independent forecaster pointed out that the industry posted its worst result in two decades for financial year 2010-11 because of major setbacks such as last summer's natural catastrophes.

Although Deloitte foresees consumer spending slightly improving for the Christmas season, it would not likely be a pronounced rebound due to the erosion of wealth caused by the decline in sharemarket and low consumer confidence due to higher unemployment.

"The implications from the financial market volatility and further deterioration of consumer confidence in August are yet to be seen in the retail sales data... When they do appear, it's unlikely to be pretty, while the next few months look like being subdued ones for retail at best," Deloitte partner David Rumbens told The Sydney Morning Herald

He said sales growth would likely peak at 1.5 per cent only after it registered a 20-year low of 1.3 per cent for the year. If the unemployment rate eases and consumer confidence improves, Rumbens said, the sector may register a healthier 3.3 per cent expansion in 2012-13.

The only subsector that showed some growth in the June quarter was household goods, while by state, Western Australia and Queensland logged higher retail sales in the same quarter.

Another study by the Swineburne University of Technology found that 25 per cent of Australians shop at least once a week. But a growing number are doing their purchasing online with an average spending of $206.

Others window shop online, but eventually buy the products from traditional retailers. Older shoppers also are purchasing online, with consumers in the age brackets 50-64 increasing their online monthly spending to $258 from $157 in the last four years.

Although 88 per cent of Americans are regular Web shoppers compared with 78 per cent for Australians, only 17 percent of Americans shop at least once a week. The figure is even lower for Europeans, Israelis and Japanese at less than 10 per cent.

"This doesn't mean that Australians are necessarily spending more money online than in retail stores, or that it is the main cause of the present retail downturn as some have suggested, but it does indicated that more people are going online to buy things more often," World Internet Project senior researcher Scott Ewing told The Sydney Morning Herald.

Despite the trend toward online transactions, Ewing said average monthly online consumer spending was basically flat for the past two years.