Tax cuts fueling revival in Australia's discretionary spending, Morningstar says

** Analysts at Morningstar expect a broad rebound in retail spending from fiscal 2025 in Australia, reflecting meaningful tax cuts coupled with larger workforce and higher wages

** Brokerage says significant interest rate cuts by the local central bank could support consumer sentiment and present upside risk to our near-term outlook

** Morningstar says trading momentum for discretionary items have already been picking up with sales growth as Woolworths' WOW Big W discount stores and Super Retail's SUL chains

** Sales momentum is also strengthening at electronics goods retailers JB Hi-Fi JBH, Harvey Norman HVN, and Kogan KGN

** Brokerage does not have a positive outlook on supermarkets as rising costs are weighing on operating margins

** Supermarkets also face heightened public scrutiny - Morningstar

** Supermarkets have lost share of the consumer's wallet as shoppers prefer eating and drinking outside the home, says Morningstar