New research confirms a mixed outlook for Australia’s retail sector, but the good news is almost half of consumers say they are maintaining or increasing their spending, and young consumers remain up-beat.

The research, conducted by Sydney-based Research Now for management consultancy firm Growth Solutions Group, shows weak and declining spending by consumers but also indicates there are signs of hope for besieged retailers.

Of those 503 respondents who say their purchasing power has decreased, consumers aged over 35 are feeling the pinch more. Seventy-one per cent (355 respondents) aged 35 to 64 say their purchasing power has decreased compared to 36 per cent (122 respondents) of consumers aged 15 to 34. And more people aged 35 to 64 – 41 per cent – will spend less this Christmas compared to 24 per cent of under 35’s.

A vast majority of these respondents, around 64 per cent, blame the increased cost of living for spending less. And almost half – 46 per cent – say they would open their wallets if purchasing power increased. Lower interest rates would be an incentive to start spending more, according to 21 per cent of respondents.

A third also say a better range of products and brands and better customer service would encourage them to increase their discretionary spend at retail outlets.

The survey follows a recent report from Deloitte Access Economics which showed retailing posted its worst results in 20 years in the 2010-2011 financial year.

According to Growth Solutions Group managing director Graeme Chipp the key outcome of the survey from a retail perspective is that despite a “doom and gloom” scenario there are people willing and able to spend.

“Importantly, the survey highlights that there are in fact some pockets for optimism and this is where retailers need to better channel their marketing efforts,” he said.