Market watchers might want to keep an eye on ASX retail shares as Black Friday proves to be a hit and the talk of mergers and acquisitions heat up.
Here's what you need to know about the record-breaking retail event and the potential outlook for the sector.
Black Friday proves fruitful
ASX retail shares rejoice, between the start of Black Friday and the end of Cyber Monday, Australians spent an estimated $8 billion on retail purchases, according to National Australia Bank Ltd. (ASX: NAB).
That's up to 8% more than 2019's pre-pandemic record Black Friday weekend spend.
The bank analysed merchant transactions to come up with the estimate, which it released today. NAB noted that the findings are a "clear boost for Australian business".
The strongest bricks-and-mortar performers? Technology and shoes.
Tech sales were up 168% compared to the Black Friday weekend of 2019, while shoe stores saw sales increase by 92%.
Meanwhile, consumers flocked online to purchase jewellery. Online stores for shiny things and wearable timepieces saw 312% more sales than they did over 2019's Black Friday weekend.
NAB Business and Private Bank group executive, Andrew Irvine commented on the retail event's popularity, saying:
It may be a trend adopted from our American friends, but it's clear that Black Friday and Cyber Monday are now a strong part of the sales calendar here in Australia.
Sadly, boosted sales didn't automatically equate to share price increases.
The share price of shoe retailer Accent Group Ltd (ASX: AX1) ended Cyber Monday 1.9% lower than it was at Thursday's close. Meanwhile, that of jewellery merchant Lovisa Holdings Ltd (ASX: LOV) slipped 5.1%.
Though, technology retailer JB Hi-Hi Limited (ASX: JBH) has seen its share price gain 0.3% over the same time frame.
Additionally, data from the Australian Bureau of Statistics for the month of October implies that increased spending over the weekend just been wasn't a once off.
The body estimates that turnover and volumes for retail businesses over the month of October rose 4.9% month-on-month and 5.2% in the same month in 2020.
Clothing, footwear, and accessory retailers, alongside department stores, led the chase with spending increasing 27.7% and 22.4% respectively.
Is the ASX retail sector set for an M&A flood?
And the skies ahead might be even more blue (or green) for ASX retail shares.
According to reporting by The Australian, experts believe the sector is ripe for mergers and acquisitions.
They reportedly stated that happenings like Adairs Ltd's (ASX: ADH) recent $80 million purchase of Focus on Furniture might be the new norm, as retailers scramble to make acquisitions to boost future growth.
Additionally, the publication claims some experts point to the recently accepted takeover offer for Australian Pharmaceutical Industries Ltd (ASX: API) – posed by Wesfarmers Ltd (ASX: WES) – as the start of a new trend.
Such a trend could see retailers branching into complimentary spaces to generate more consumer spending.
The publication also claims Universal Store Holdings Ltd (ASX: UNI) looked to get in on the acquisition action. It was reportedly on board to purchase General Pants.
Finally, according to The Australian's experts, acquisition-hungry investors might want to keep an eye on JB Hi-Fi and Super Retail Group Ltd (ASX: SUL). The latter's brands, Super Cheap Auto, Rebel, and Macpac, are said to be on the hunt for acquisitions or mergers.
The Motley Fool Australia reached out to Universal Store for comment but didn't receive an immediate response.
