By Shivaun Hales

Small businesses in the mining and non-retail sectors experienced better than expected growth over Christmas, however retailers lagged behind.

ANZ Banking Group's monthly Small Business Sales Trends report indicated December sales were up 3.3% from the same time in 2010.

The sales growth was largely driven by strong results in mining states and non-retail sectors.

Western Australia exceeded other states and territories, recording a sales rise of 4.9% in December compared to a year prior.

Non-retail and service sectors overtook traditional retailers in December, with trades increasing by 6.4% and the automotive sector up 8.2%.

Overall, small retail-related businesses' sales increased just 1.8%.

ANZ GM of small business Nick Reade said although it was an increase, anecdotal reports suggested retailers had to introduce heavy discounts to achieve that growth and move stock.

Restaurants recorded the strongest growth within retail-related small businesses, with sales up 10% from December 2010.

Small business sales for 2011 increased by 1.9% overall, despite the slight gain, Reade said it was a concern.

"Essentially, what we're seeing is still a very mixed story for small-business sales, with wide gaps across geographies and between segments, particularly between retail versus the trades and services," Reade said.

The report was based on the value of credit, debit and Eftpos transactions processed through ANZ merchant terminals and all ANZ card purchases processed through other systems for businesses at least two years old with annual turnover below $5 million.