With interest rates expected to fall further this year, consumer spending could rebound strongly in FY 2026.
As a result, now could be a great time to gain exposure to the retail sector.
But which ASX retail shares could be good picks? Let's take a look at three of the best to buy in the new financial year according to analysts at Bell Potter. Here's what it is bullish on:
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JB Hi-Fi Ltd (ASX: JBH)
Bell Potter is very positive on consumer electronics leader JB Hi-Fi and sees it as an ASX retail share to buy.
The broker believes it is well-placed to benefit from an artificial intelligence (AI) fuelled upgrade cycle of devices. It explains:
We view the retailer as being able to support a higher multiple as we see a sizable upside from the AI driven upgrade cycle/replacement cycle of devices purchased during COVID-peak and given the similarities of JBH and other low gross margin yet high-earnings quality retailers globally.
Bell Potter has a buy rating and $114.00 price target on its shares.
Propel Funeral Partners Ltd (ASX: PFP)
Another ASX retail share that makes the broker's list is Propel Funeral Partners.
It notes that it is among the defensive names in the consumer sector as the second largest funeral home operator in the ANZ region with an estimated market share of ~10%.
The broker believes the company is well-placed for growth over the medium term. It also sees plenty of value in its shares based on industry transaction. It explains:
The announcement related to the leadership change (internal succession), due at the end of June, remains a short-term catalyst. As more medium to long term catalysts, we expect demographic tailwinds from an ageing baby boomer population to be a sizable catalyst to mid-long term volume growth and M&A activity from 1H26 to drive overall revenue growth above mid-single digit organic growth. We also see upside based on the transaction multiples in the space over the past 2 years as PFP remains to be one of the four listed deathcare players globally.
Bell Potter has a buy rating and $5.50 price target on its shares.
Universal Store Holdings Ltd (ASX: UNI)
A third ASX retail share that Bell Potter is recommending for FY 2026 is Universal Store.
It is a leading youth focused apparel, footwear, and accessories retailer in Australia with around 100 stores across its Universal Store, Perfect Stranger, and Thrills brands.
Bell Potter believes the company has a clear growth trajectory from store network expansion and the opportunity to boost its margins through its private label offering. It said:
Management execution is a key competitive advantage for UNI and we see a clear growth trajectory for the name as both core brands and a strong store network is built out. We view distinctive growth traits, longer term store opportunity and organic gross margin expansion via private label product penetration (currently ~52%) as able to well justify the 1-year forward basis 15x P/E.
The broker has a buy rating and $10.50 price target on its shares.
