Department stores are the hardest hit in the latest retail trading update.
But it's not all bad news.
Australian retail spending rose five per cent in August, seasonally adjusted, compared with August 2013.
Total retail spending was $23.312 billion in August, up from $23.297 billion in July.
These are the latest figures from the The Australian Bureau of Statistics (ABS).
The increase follows year on year growth of 5.8 per cent in July.
Month on month growth was slower, rising by 0.1 per cent over July.
Clothing, footwear and personal accessory retail was among the top performing categories, rising 0.3 per cent.
However department stores suffered a 2.9 per cent decline.
Australian Retailers Association executive director Russell Zimmerman said clothing sales continue to look promising.
"The Australian Retail Index (delivered by BDO and Retail Express) also confirmed the stand-out performers for late August were Fashion & Accessories and Sporting & Recreational Goods - both categories up by over eight per cent.
"These results were even better than those seen in the same week in 2013, confirming that retail sales are in a healthier position than they were 12 months ago.
"While we are hopeful that September figures will continue to highlight positive growth with the change in season encouraging consumers to update their wardrobes, it is imperative that the Federal Government and RBA do all that they can to ensure that retail trade is fully supported."
Zimmerman said interest rates should remain low to support business in the lead up to Christmas.
Northern Territory led state-by-state increased with 1.7 per cent growth; followed by Victoria, 0.7 per cent; and Western Australia, 0.1 per cent.
Queensland recorded a decline of 0.6 per cent; followed by Australian Capital Territory, 0.4 per cent; and NSW, 0.1 per cent.
South Australia remained the same.