UBS tips 4 ASX 200 retail shares to benefit from the federal budget

buy transaction between a customer and a merchant

buy transaction between a customer and a merchant

Four S&P/ASX 200 Index (ASX: XJO) retail shares look to be among the winners from the 2023 federal budget just unveiled by Treasurer Jim Chalmers.

That’s according to UBS strategist Richard Schellbach.

Schellbach (as reported by The Australian) believes these four ASX 200 retail shares – encompassing both consumer discretionary and consumer staples stocks – could benefit from the federal budget’s billions of dollars of support for low-income households.

Among the measures contained in the 2023 federal budget are:

  • A $40 fortnightly increase in JobSeeker
  • $500 of rebates to five million low-income households as part of a $1.5 billion Energy Relief Fund
  • A $40 fortnightly increase in Youth Allowance and Austudy
  • A $1.3 billion Household Upgrades Fund targeting 111,000 households

Which ASX 200 retail shares might benefit from the federal budget?

According to UBS, the federal budget’s low-income support measures should offer some tailwinds to Wesfarmers Ltd (ASX: WES). That’s largely from a potential revenue boost for its lower-cost Kmart segment.

The Wesfarmers share price is down 0.39% in midday trading and up 12% so far in 2023.

The second ASX 200 retail share UBS thinks could gain from the federal budget is Domino’s Pizza Enterprises Ltd (ASX: DMP). With the boost in the JobSeeker and Youth Allowance payments, it’s a good bet some of that money will find its way into home-delivered pizzas.

The Dominos share price is down 0.67% today and down 22.5% so far in 2023.

Which brings us to ASX 200 retail share number three, Coles Group Ltd (ASX: COL). The grocery store retailer has been promoting its low-cost items and could see more customers with a little extra cash in their pockets thanks to the federal budget.

In its recent third-quarter results, Coles reported that it had doubled the size of its ‘Dropped & Locked’ value campaign, with the price of more than 300 products dropped and locked in.

The Coles share price is down 0.33% today and up 9.7% in 2023.

Rounding off the list, the fourth ASX 200 retail share UBS tips to benefit from the federal budget is Super Retail Group Ltd (ASX: SUL).

The company’s brands include Supercheap Auto, Rebel, BCF, and Macpac, outlets that could see more business from low-income households with a bit more cash coming in courtesy of the budget.

The Super Retail Group share price is down 0.55% today and up 16.5% in 2023 so far.

The post UBS tips 4 ASX 200 retail shares to benefit from the federal budget appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and Super Retail Group. The Motley Fool Australia has positions in and has recommended Coles Group, Super Retail Group, and Wesfarmers. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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