Why ASX 200 retail shares like JB Hi Fi (ASX:JBH) are outperforming

While the ASX 200 fell today, many ASX 200 retail shares enjoyed gains. We look at what’s driving investor interest.
The post Why ASX 200 retail shares like JB Hi Fi (ASX:JBH) are outperforming appeared first on The Motley Fool Australia. –

asx retail shares represented by woman excitedly holding shopping bags

The broader S&P/ASX 200 Index (ASX: XJO) is sold off today, down 0.8% at the closing bell.

ASX 200 shares are widely following the lead of US share markets, which fell yesterday (overnight Aussie time) on investor fears of rising inflation.

But not all Aussie shares are slipping.

The JB Hi Fi Ltd (ASX: JBH) share price closed up 2%. And gaming stock Aristocrat Leisure Ltd‘s (ASX: ALL) share price ended the day up 2.3%.

Both these companies fall into what you may have heard called discretionary retail. That is, they sell items that you may want to have but most likely don’t really need to have. Like that newer model TV. Or the super-cool drone you’ve had your eye on.

Non-discretionary retailers, on the other hand, sell items like bread… or toilet paper. The essential stuff you can’t really do without.

Cashed up consumers with pent up demand

The pandemic, somewhat counterintuitively, has sent average household savings up far higher than before COVID struck. That’s thanks to record levels of government stimulus for both businesses and households in most developed nations while many folks remained stuck at home.

According to Bloomberg:

Consumers in the world’s largest economies amassed [US]$2.9 trillion in extra savings during Covid-related lockdowns… Half that total — $1.5 trillion and growing — is in the U.S. alone, the data show…

The optimists are betting on a shopping spree as people return to retailers, restaurants, entertainment venues, tourist hot spots and sports events as well as accelerate those big-ticket purchases they held back on.

The same story is playing out Down Under. According to the Australian Financial Review, “Australian households saved $187 billion over 2020, more than the previous 3½ years combined”.

Advantage ASX 200 discretionary retail shares

In a live Webinar yesterday, Bell Asset Management’s Senior Global Equities Analyst, Nicole Mardell said 2021 offers some particularly appealing opportunities in consumer discretionary shares:

Within the discretionary space there’s a lot of pent-up demand that’s still to be realised across a number of subsectors. The consumer represents about 75% of the US economy, and that consumer has just been flooded with a whole bunch of cash. And they’re still in lockdown.

Consumers also make up a huge chunk of the Australian economy, some 65% or so. And while cashed-up consumers are unlikely to buy more bread, they’re quite likely to splurge on those non-discretionary items they’ve been eyeing.

And that could spell good news for the share prices of leading ASX 200 retailers.

Where to 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 are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why ASX 200 retail shares like JB Hi Fi (ASX:JBH) are outperforming appeared first on The Motley Fool Australia.

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!