"The retail sector is struggling and you might even say it's on the ropes, " one of Australia's leading economists told Xinhua on Friday after the release of new economic spending data down under.

Following two previous months of decline in July and August, the Australian Bureau of Statistics' retail spending figures for the month of September came in flat with a 0.4 percent increase.

Seasonally adjusted, the 25.9 billion Australian dollar (19.90 billion U.S. dollars) total across the sectors saw clothing, footwear and personal accessories drop 0.7 percent, while household goods slid a further 0.4 percent.

"I think it's a sign that households are struggling under the weight of low wage growth, rising utility bills, high household debt and now a stagnating housing market," Capital Economics' chief Australia & New Zealand economist Paul Dales said.

"It's especially worrying that retail volumes in the third quarter as a whole, only rose by 0.1 percent even though retailers heavily discounted their goods and services during that time."

"So even when prices were falling, households didn't really take their wallets out of their pockets."

Despite the poor performance, Australia's department stores did manage to post a firm result, lifting 2.1 percent for September, along with food retailers who improved sales by 0.6 percent.

Upon the news of the lackluster data, the Aussie dollar sank from 77.14 U.S. cents immediately before the read at 11:30 (AEDT), to 76.85 U.S. cents at 11:35 (AEDT).

With a lack of momentum leading into the crucial Christmas period, Dales feels it's a bit "worrying."

"It might be the case that this Christmas doesn't provide many gifts for retailers themselves, as households may not be as generous as they have been in previous Christmases," he said.