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Can ASX 200 retail shares outperform this year?

ASX 200 retail shares have had a pretty tough start to the year. Even before the coronavirus pandemic, things were looking pretty bleak.

We’ve seen a continuing trend of insolvency action, with brands like Jeanswest and Kikki.K falling into voluntary administration.

Then the pandemic hit and the situation deteriorated further. ASX 200 retail share prices were hammered as lockdown restrictions were introduced. This crushed bricks and mortar sales as businesses were forced to temporarily close.

But now restrictions are continuing to ease and the economy is emerging from hibernation. Could this mean Aussie retail shares are set to outperform in 2020?

Will ASX 200 retail shares outperform in 2020?

I think the JB Hi-Fi Limited (ASX: JBH) share price could outperform this year. The Aussie electronics retailer has already seen some strong sales as workers moved to a ‘work from home’ model and rushed to stock up on computers, monitors and accessories. This was good news for the ASX 200 retail share but there could be more on the way.

If businesses continue to operate at a reduced capacity, I think this could result in more sales for JB Hi-Fi. Aussie workers may move from temporary work-at-home setups to more permanent home offices. This could mean more spending on equipment and be very good news for retailers like JB.

I also think Harvey Norman Holdings Limited (ASX: HVN) is worth a look. Harvey Norman is a more diversified retailer which means there are more potential earnings streams.

The real question here is whether or not Aussies continue to spend. While many are keen to get back to shopping as soon as possible, the tough economic conditions could definitely impact discretionary spending.

However, if supply chains are maintained and we see government stimulus measures continue, I think the Aussie retail share could outperform this year.

Foolish takeaway

The S&P/ASX 200 Index (ASX: XJO) is down 12.70% this year. Meanwhile JB Hi-Fi shares are up 3% while Harvey Norman shares have fallen 15.72%.

If the economy continues to pick up then I think both of these ASX 200 retail shares could outperform by the end of the year.

These 3 stocks could be the next big movers in 2020

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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