The entire retail sector is being transformed as they move towards and focus on online sales. This entire migration has been accelerated by the pandemic and the restrictions that came with it.
Here are all the sectors that’ll benefit from Covid-19 vaccine. While retail is not a part of this list, retail stocks are heavily dependent on consumer spending and the government’s fiscal policies have been targeted to boost consumer spending.
Going forward, the growth in ecommerce will boost the retail sector. The added stimulus is bound to increase consumer spending further as Australia recovers from the pandemic. These are all good news for retail stocks. Along with retail, here are the top 5 ASX stocks to look out for in 2021.
An e-commerce stock that has returned 322% year-to-date. It is an online marketplace where artists can sell their work – anywhere from paintings to mugs to apparel printed with their art. It is a fairly large marketplace now and the firm has had tailwinds driven by consumers starting to buy into online shopping during the pandemic. With spending high during the holiday season, we are expecting Aussies to look for slightly less expensive gifting options than otherwise, given the money crunch situation with high unemployment rates. An outperformance in sales during the quarter may thus be in order, making RBL a top notch retail stock to buy.
A retailing giant that needs no introduction in the land down under. Want to buy anything for your home? Head over to JB Hi-Fi. With the pandemic restrictions and the government easing financial pressure with tax cuts and jobkeeper payments, Aussies are now buying things for their home without having to go to JB Hi-Fi. A mobile and internet is all you need, and certainly one you have if you are reading this blog. In the September quarter, JBH posted a 27% growth in sales. In the previous corresponding period, it was just 4.7%.There are several tailwinds for the business and sector and it makes into our pick of the top retail stocks on the ASX.
Similar to JB Hi-Fi, Harvey Norman is another household name when it comes to buying anything for your home. The company has 195 franchised complexes under the Harvey Norman, Domayne, and Joyce Mayne brands in Australia; and 96 company-operated stores under the Harvey Norman brand in New Zealand, Singapore, Malaysia, Slovenia, Croatia, Ireland, and Northern Ireland. It is also involved in the property investment and media placement activities, as well as provides consumer finance and other commercial loans and advances. Harvey Norman is thus a very well diversified company that has returned 43% in the past 6 months and even has a healthy dividend yield of 3.5% – making it a top pick if you are on the lookout for retail stocks.
Kogan in an online retailer or e-commerce platform in Australia. While the lockdowns persisted, the switch to e-commerce has fast-tracked in Australia. Kogan offers various brands on its website across a wide array of categories such as electronics, toys, homewares, etc. They also own and operate 20 private label brands. The firm has also entered into markets such as pre-paid mobile phone plans, travel booking, insurance, NBN, etc. They are thus becoming into a mini-Amazon and we all know how that story has unfolded. The recent performances have been very strong and KGN is a must have retail stock in your portfolio.
Wesfarmers may not be a high growth company such as some in this list. However, they are certainly huge and very sustainable. They operate under well known brands such as Bunnings, Kmart, Officeworks, etc in Australia, New Zealand and the UK. All of these are extremely crucial to Australians on a daily basis – suggesting that revenue generation of Wesfarmers group is very sustainable. The firm has been aggressively shifting towards online retail in order to future proof its business. They have a very stable dividend policy as well and is certainly one to consider when looking at retail stocks.
Retail seems like a very good sector to be in right now. The macro economic factors at play support it and there are more tailwinds coming its way. Shares in Value can help identify sectors that are boosted by tailwinds and help you make informed decisions when stock picking.