The Morrison government's tax cuts have failed to stimulate meaningful consumer spending, as the odds of a Melbourne Cup day rate cut shorten and customers stay away from the shops.

Retail spending rose by a weaker than expected 0.4 per cent in seasonally adjusted terms in August after the Australian Tax Office had delivered tax refunds worth $14.5 billion to 5.4 million workers.

Retail figures in August were below market expectations. Credit:Sasha Woolley

Purchases were up at clothing, household goods and department stores as consumers spent some of the extra cash on discretionary items, but this was offset by falls in spending in cafes and restaurants and on takeaway food.

Online shopping has continued its rise, accounting for 6.2 per cent of all spending, up from 5.5 per cent this time last year, as it takes market share from bricks-and-mortar operators.