JB Hi-Fi has unleashed fresh promotions to likely pick up extra disposable income from recent tax cuts

Retailers such as JB Hi-Fi are wondering if consumers will save their fatter wages from the recent tax cuts or spend it as the money starts burning holes in pockets.

JB Hi-Fi has upped its promotions in a likely attempt to grab some of the extra income generated for consumers by the July 1 tax cuts. Picture: Dan Himbrechts/AAP

Investors and analysts will be looking for early signs of a “July bump” for discretionary retailers this reporting season, as many chains leverage the recent tax cuts by dazzling shoppers with promotions and discounts.

With many Australians already receiving their first wages on new tax scales brought in from July 1 — giving them a boost to take-home pay — the retail sector is out in strength to attract some of the extra spending power.

Consumer electronics giant JB Hi-Fi looks to be leading the pack of discretionary retailers on this front.

The retailer, which also owns white goods specialists The Good Guys, has launched its second storewide “perks” deal this month, a lift on the discounting offered in July.

Retail analysts at Citi believe this could be the retailer taking advantage of the July tax cuts now flowing into consumer bank accounts.

“While this may appear to be indicative of an elevated level of discounting, we believe this is merely JB Hi-Fi reorganising their promotional calendar to take advantage of the 1 July stage three tax cuts,” said Citi analyst Adrian Lemme.

“We believe this sets up JB Hi-Fi to produce a solid trading update at the full year result in August.”

Rival consumer electronics, bedding and homewares chain Harvey Norman has also pulled the lever on a promotional campaign.

Under the tax cuts all 13.6m Australian taxpayers will receive a tax cut from 2024–25 onwards, with a person on the average wage of around $73,000 to get a tax cut of $1504.

When reporting season kicks off next month investors will be eager to not only see the results over the fiscal 2024 year but also learn more of retail operational and trading performances since July, which will include the first few weeks of fatter wages for the majority of Australian workers.

The key news will be if extra income generated by the tax cuts was saved or spent, and if spent, was it directed to necessities such as food and groceries or put towards discretionary goods and services as provided by retailers such as JB Hi-Fi.

Meanwhile, JB Hi-Fi is expected to report its full-year results early in reporting season, with continued interest among shoppers in getting their hands on the latest smart phone or gaming console likely to bolster sales.

This was especially the case for any device which can boast an artificial intelligence component.

Citi said recent industry feedback in the electrical category has been more positive, with the launch of AI PCs (most launched at JB Hi-Fi on June 18) helping sales.