ASX 200 retail shares in focus amid bumper Christmas forecast

Retailers could be set for another big windfall during the pre-Christmas trading period…
The post ASX 200 retail shares in focus amid bumper Christmas forecast appeared first on The Motley Fool Australia. –

Christmas is fast approaching and research is indicating it will be another big season for spending. The cash-splashing festivities place ASX 200 retail shares back in the frame as potential beneficiaries. This follows another calendar year of sporadic lockdowns and restrictions throughout Australia due to COVID-19.

While financials have been the best performing sector across the S&P/ASX 200 Index (ASX: XJO), predictions of a spending binge towards the end of the year might boost consumer discretionary shares.

Pocketed cash ready to be unleashed

In a release from the Australian Retailers Association (ARA) today, pre-Christmas retailer trade has been given a price tag. According to the ARA, in conjunction with Roy Morgan, it is believed pre-Christmas spending will broadly match last year’s figure. This would suggest retail trade in the ballpark of $58.8 billion.

The pandemic has undoubtedly put a dent in our lives in various ways. Yet, retail trade has increased from its pre-pandemic levels in spite of the toll it has taken on the economy. In fact, the ARA’s forecast for this year’s pre-Christmas spending is 11.3% above what was recorded in 2019.

Furthermore, the forecast comes at a time when Australian savings remain elevated above historical levels. Although the household saving ratio has been in decline since June — as Aussies begin to increase spending — there seems to be plenty of spending fodder in the tank, potentially to be spent at ASX 200 retailers.

Source: Australian Bureau of Statistics – Australian National Accounts June 2021

Speaking on the bumper pre-Christmas spending forecasts, Roy Morgan CEO Michele Levine said:

Our sales forecasting reveals a country on the move; a consumer economy exhibiting all the signs of pent-up demand. No one believed that spending this coming Christmas could match the highs of last year. But as the population emerges from the most punishing crisis in a hundred years, shoppers are looking to reward themselves and their families.

The sales aren’t all going to be instore, however. The COVID 5-year digital acceleration means many more Australians are shopping online. So, this Christmas we will see much more of a mix between instore and online shopping

ASX 200 shares supporting a fresh new look

The ARA also outlined some key categories that could be set for a boost in trade. These include clothing, fashion, accessories, and hospitality. Such categories are ones that haven’t received as much attention prior to lockdowns lifting.

However, as ARA chief executive Paul Zahra mentions, the reopening could change that:

I think there’s no doubt there will be a focus on experience because we have not been able to connect, so people will be out and about and we are obviously seeing that in restaurant and cafe numbers.

Clothing and footwear and accessories are a big opportunity as consumers will be able to go to events, they will be able to go out, face to face and want to refresh their wardrobe because they have not done that for some time – and people’s waistlines might have changed through lockdowns.

Another big season will likely benefit the ASX 200 top dogs, such as JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN). However, with a focus on clothing, footwear, and accessories, other ASX-listed retailers could also see a boost.

Companies like Accent Group Ltd (ASX: AX1), Lovisa Holdings Ltd (ASX: LOV), and City Chic Collective Ltd (ASX: CCX) stand out.

The post ASX 200 retail shares in focus amid bumper Christmas forecast appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Why the Arafura (ASX:ARU) share price has rocketed 42% in just one month

Why did the Magellan (ASX:MFG) share price smash the ASX 200 today?

Could the Ethereum price track Bitcoin to new record highs?

The CSL (ASX:CSL) share price is up just 3% so far in 2021. Here’s why

Own Woolworths (ASX:WOW) shares? Here’s why the company is in the news

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!