Despite the cost-of-living crisis and weak consumer sentiment, ASX consumer discretionary shares were resilient last year and the third-strongest sector for stock price growth.
Consumer discretionary shares rose by 20.71% and delivered total returns (including dividends) of 23.91%.
By comparison, the S&P/ASX 200 Index (ASX: XJO) rose by 7.49% with total returns of 11.44%.
Experts say 2025 is looking like another pretty good year for the consumer discretionary sector.
Last week, the ASX 200 roared to a new all-time high of 8,566.9 points following better-than-expected December quarter inflation data that raised hopes of a long-anticipated interest rate cut this month.
ASX consumer discretionary shares were the best of the 11 sectors last week, rising 4.3%, and sector heavyweights Wesfarmers Ltd (ASX: WES) and Aristocrat Leisure Ltd (ASX: ALL) set new record highs.
Deloitte Access Economics partner David Rumbens says the first interest rate cut, coupled with savings from tax cuts that began in July last year, may prompt consumers to spend more in 2025.
In his latest Retail Forecasts report, Rumbens said:
A rate cut from the RBA … could be the green 'go' light consumers need to see before feeling comfortable letting loose.
As a result, real retail turnover is expected to lift from -0.3% in calendar year 2024 to 2.1% in 2025 and 2.5% in 2026, as consumers get their spending groove back on.
On Friday, Dr Shane Oliver, Chief Economist at AMP Ltd (ASX: AMP) told news.com.au:
A rate cut should favour rate sensitive parts of the market including consumer discretionary and consumer staples.
Consumer staples benefit as well because people spend on higher margin stuff in good times.
But Rumbens warns there are still risks for the consumer retail sector, commenting:
Uncertain timing for the shift in consumer spending and the 'discount dilemma' remains crucial challenges for retailers.
The impacts of potential trade policy changes from a new administration in the US and the upcoming domestic federal election may also introduce some bumps in 2025.
However, these risks should not overshadow the fact that a consumer recovery is on the cards for 2025 and beyond.
So, what does this all mean for ASX consumer discretionary shares' dividends this year?
Dividend forecasts for ASX 200 consumer discretionary shares
Let's take a look at the forecast 2025 dividend yields for ASX 200 consumer discretionary shares.
We'll focus on the top 10 dividend-paying consumer discretionary shares by market capitalisation.
The following chart shows the consensus analysts' forecasts for 2025 dividends, as published on the CommSec trading platform.
It also shows the dividend amounts paid by these consumer discretionary shares last year so you can compare the amounts.
We have calculated the dividend yields based on Friday's closing share prices.
These ASX 200 consumer discretionary shares are ranked by market cap from largest to smallest.
| ASX consumer discretionary share | 2024 dividend | Forecast 2025 dividend | Yield |
| Wesfarmers Ltd (ASX: WES) | $1.98 | $1.98 | 2.58% |
| Aristocrat Leisure Ltd (ASX: ALL) | 78 cents | 87 cents | 1.15% |
| Lottery Corporation Ltd (ASX: TLC) | 18.5 cents | 16 cents | 3.17% |
| JB Hi-Fi Ltd (ASX: JBH) | $3.41 | $2.64 | 2.6% |
| Harvey Norman Holdings Ltd (ASX: HVN) | 22 cents | 28 cents | 5.38% |
| Breville Group Ltd (ASX: BRG) | 33 cents | 37 cents | 0.97% |
| Guzman Y Gomez Ltd (ASX: GYG) | N/A | 0.009 cents | 0.02% |
| Flight Centre Travel Group Ltd (ASX: FLT) | 40 cents | 54.8 cents | 3.07% |
| Premier Investments Limited (ASX: PMV) | $1.008 | $1.12 | 4.69% |
| Idp Education Ltd (ASX: IEL) | 34 cents | 37 cents | 2.78% |
As you can see, ASX furniture and electronics retailer Harvey Norman is expected to pay the highest dividend yield in 2025 at 5.38%.
