ASX retail shares in focus as CBA forecasts bumper Black Friday weekend

ASX retail shares could be about to experience a strong Black Friday sales weekend.

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Analysis from Commonwealth Bank of Australia (ASX: CBA) suggests that ASX retail shares may be about to enjoy an important bump in sales for Black Friday.

CBA has been looking at its merchant data over the four days from Black Friday to Cyber Monday in previous years to get a sense of how much sales might grow.

In 2020, spending over the four days (27 November to 30 November) increased by 14% compared to the prior week.

It was a similar story in 2019. In the four days of Black Friday sales (29 November to 2 December), sales also increased by 14% compared to the same four days of the prior week.

It’s true that Black Friday sales in both 2019 and 2020 saw a bump compared to normal trading, but CBA also said it was interesting to note that overall spending increased by 10% in 2020’s Black Friday period compared to the 2019 Black Friday event.

This might suggest good news for ASX retail shares.

Does this mean 2021 Black Friday sales are going to be strong?

Head of Consumer and Diversified Industries in CBA’s Business Banking division, Jerry Macey thinks that the upcoming Black Friday sales could be good for both customers and businesses:

The increase in sales in 2020 in comparison to 2019 bodes well for the Black Friday sales this coming weekend. Shoppers across the country are increasingly taking advantage of the recent move towards pre-Christmas discounting and we would expect this trend to continue this year.

Businesses are viewing the Black Friday and Cyber Monday weekend period as an opportunity for them to grow their customer base as spending patterns and behaviours change. It also presents an opportunity for retailers to bring forward sales, optimise their inventory and enhance performance for the year if they manage these sales events well.

CommBank research shows that the majority of customers are keen to take advantage of discounted products and services. Those CBA shopping insights show 82% of Aussies will try to “make the most of any discount or rewards available to them”, whilst 80% said they are “encouraged to shop again at those retailers offering discounts or rewards.”

Which ASX retail shares could see a bump of sales?

There are plenty of retail shares on the ASX like Wesfarmers Ltd (ASX: WES), Harvey Norman Holdings Limited (ASX: HVN) and Adairs Ltd (ASX: ADH).

CBA said that judging by spending trends of previous years, the big winners this year are expected to be clothing and cosmetic retailers (which saw growth of 34% and 46% respectively). In those spaces are ASX shares like Premier Investments Limited (ASX: PMV), City Chic Collective Ltd (ASX: CCX), Adore Beauty Group Ltd (ASX: ABY) and Australian Pharmaceutical Industries Ltd (ASX: API).

Furniture and electronic retailers saw sales growth of 33% and 26% respectively in 2020. Temple & Webster Group Ltd (ASX: TPW) and Nick Scali Limited (ASX: NCK) are two of the largest furniture retailers whilst Ltd (ASX: KGN) and JB Hi-Fi Limited (ASX: JBH) are two large players in the electronics retailing sector.

New CBA shopping offering

CBA is also spruiking its new shopping offering for consumers which includes the newly launched deal discovery app, Cheddar, investment in gift card disrupter, Karta, its partnership with online shopping hub, Little Birdie, and its cashback program, CommBank Rewards.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ADAIRS FPO, ltd, and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO, Harvey Norman Holdings Ltd., ltd, and Wesfarmers Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Premier Investments Limited, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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