Westpac Melbourne Institute Index of Consumer Sentiment shows September’s figure fell 4.6 per cent on August’s reading to 94 points.

Margy Osmond, CEO of the Australian National Retailers’ Association (ANRA), said the result provides further evidence of just how fragile consumers currently are, with rising unemployment, soft consumer confidence and an unpredictable Senate continuing to weigh on their minds.

“Sentiment is now almost six per cent below its pre-Budget level and retailers will be watching carefully to see if falling sentiment has a direct impact on retail sales in the coming months.

“Retailers will be most concerned by the five year economic outlook results. The sub-index is now at its lowest level in 16 years, indicating that households expect current economic weakness to continue for some time, and making households more cautious in the medium term.

“Retailers are hopeful that sentiment improves over the coming months as the all important Christmas shopping period fast approaches. Retail figures for July out earlier this month sparked retailers’ hopes of reaching annual growth of six per cent by the end of the year and we hope today’s fall in sentiment is just a blip,” said Osmond.