A $16 billion boost to disposable income should have opened consumers' wallets, but as yet they remain closed.

There was plenty of hype and anticipation attached to the July retail sales numbers released by the Australian Bureau of Statistics (ABS) on Tuesday. So the 0.1 per cent fall in retail sales was a serious letdown. Economists had anticipated a rise of 0.2 per cent.

The flood of cash that has hit consumers courtesy of a two interest rate cuts and two tax offset payments - which according to Westpac economist Matthew Hassan adds up to $16 billion - and a robust increase in company dividend payments were bill-boarded as the great hope for the retail sector. It was a chance for it to lift itself out of what many describe as an industry recession.

Shoppers are keeping their wallets closed. Credit:Ellen Smith

It is true that people can be a bit tardy putting in their tax returns, so not all have pocketed their cash yet and the second half dividend payments have yet to hit recipients’ bank accounts.