S&P/ASX 200 Index (ASX: XJO) retail shares have been enjoying some strong tailwinds from cashed-up consumers.
In 2020, Australian households saved $187 billion. That's more than Aussie households managed to sock away in 2017, 2018, and 2019…combined.
The combination of cashed-up consumers with pent-up demand after enduring months of social distancing and lockdowns is good news for ASX 200 retail shares. Especially with consumer spending comprising some 65% of the Australian economy.
While that's good for all types of ASX retail shares, discretionary retail shares (those selling items we don't necessarily need but want to own anyhow) are tipped to outperform.
Image source: Getty Images
So which ASX 200 retail shares stand out?
Dermot Ryan is a portfolio manager at AMP Capital.
As the Australian Financial Review reports, Ryan believes Harvey Norman Holdings Limited (ASX: HVN) is among the ASX 200 retail shares "set to prosper as consumer spending strengthened through the economic recovery".
Why?
According to Ryan:
We've been very keen on the retail space. We've been playing really strongly in that discretionary spend and we've seen very strong dividends from that sector… Australia has had a massive rebound because we've had one of the biggest stimulus programmes in the world and we haven't really had that much COVID.
Harvey Norman share price snapshot
Harvey Norman shareholders have been well rewarded over the past 12 months, with shares up 43%. By comparison, the ASX 200 is up 4% in that same time
Though shares are slipping today, down 2.17% in early afternoon trading, the Harvey Norman share price is up 9% in 2021, while the ASX 200 is down just under 1%. The company has a market capitalisation of $6.6 billion.
Harvey Norman pays an annual dividend yield of 7.15%, fully franked.
