The latest credit and debit card usage data is giving investors a new reason to feel bullish on the ASX retail sector.

Spending on cards issued by Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) have not only recovered from the COVID-19 blues but is ahead of what it was this time last year.

Charge it to the card

Card data from CBA is up 4% in the week to 22 May, while ANZ reported a 2.3% rise, according to the Australian Financial Review.

However, some of the increase in card use may be due to the growing popularity of tap and pay to limit infection transmission.

ANZ also pointed out that the spending surge may not mean actual growth in consumer spending but households dipping into their travel and holiday budgets to fund purchases.

Better than expected result

Regardless, the sharp rebound is an unexpected surprise as the shutdown of our economy to contain the coronavirus pandemic dealt a devastating blow to the consumer discretionary sector.

ANZ economist Adelaide Timbrell told the AFR that ANZ-observed retail spending is still stronger than what the bank expected before the full reopening of our economy.

Consumers in Western Australia are leading the spending charge with a 12% increase over the previous corresponding period (pcp), according to the ANZ data.

On the flipside, Victoria is the worst state as card spending dropped 5.5% pcp. This is probably because the state is the slowest to relax its lockdown rules.

Patchy results

The latest data adds to signs that the retail sector is turning the corner. Consumer discretionary stocks have enjoyed a re-rating in their share prices that was fuelled by better than expected trading updates from retailers like City Chic Collective Ltd (ASX: CCX), Baby Bunting Group Ltd (ASX: BBN) and JB Hi-Fi Limited (ASX: JBH).

But not all consumer facing stocks are benefiting from the spending recovery. Travel and entertainment spending have collapsed due to the coronavirus.

This means we will have to wait a while before Sydney Airport Holdings Pty Ltd (ASX: SYD) and Flight Centre Travel Group Ltd (ASX: FLT) enjoy a rebound in revenue.

Also, retailers who cater to tourists and overseas students won’t be feeling the love from the latest card data.

International travel came to a near complete halt amid the outbreak and will be among the last sectors to recover from the COVID-19 fallout.

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Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited and Commonwealth Bank of Australia. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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If you have room to add a growth share or two to your portfolio, then I think the three listed below could be worth considering.

I believe all three have earnings on upwards trajectories and could provide investors with strong returns over the next decade. Here’s why I would invest $3,000 into them:

a2 Milk Company Ltd (ASX: A2M)

The first growth share I would suggest investors consider buying is this fresh milk and infant formula company. It has consistently grown its earnings at a very strong rate over the last few years thanks to increasing demand for its infant formula in China. The good news is that although it is generating material sales in the key market, it still only has a relatively small market share. I believe this gives it a long runway for growth over the coming years.

Aristocrat Leisure Limited (ASX: ALL)

It has been a difficult few months for Aristocrat Leisure because of casino closures during the pandemic. However, with casinos around the world slowly reopening, demand for its industry-leading pokie machines looks set to rebound again. Combined with its fast-growing digital business, which is has been thriving during lockdown, I believe the future is very bright for this gaming technology company.

Nanosonics Ltd (ASX: NAN)

Another growth share to consider buying is Nanosonics. It is the infection control specialist behind the industry-leading trophon EPR disinfection system for ultrasound probes. The system has been growing its market share at a rapid rate in recent years, but has still only captured a relatively modest amount of it. In light of this, I expect the company to continue to grow its market share in the coming years, underpinning strong earnings growth. This should be supported by the launch of several potentially lucrative new products.

More reading

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Australian share market is home to a number of high-quality blue chip shares.

However, with so many for investors to choose from, it can be difficult to decide which ones to buy.

To narrow things down, I’ve picked out three blue chip shares which I think are great options for investors right now. They are as follows:

Coles Group Ltd (ASX: COL)

The first blue chip to consider buying is Coles. I think it could be great long term option due to its solid growth potential thanks to its defensive earnings, expansion opportunities, and its refreshed strategy. In respect to the latter, the Smarter Selling pillar of its strategy is aiming to deliver $1 billion in cumulative savings by FY 2023. This will be through initiatives including the use of technology to automate manual tasks and simplifying above-store roles to remove duplication.

CSL Limited (ASX: CSL)

Another blue chip share to buy is CSL. I believe the global biotherapeutics giant is one of Australia’s highest quality companies and a great buy and hold option. This is due to the strength and growth potential of its CSL Behring and Seqirus businesses. I believe CSL’s Behring business in particular is well-placed for growth thanks to increasing demand for immunoglobulins, its growing plasma collection network, and burgeoning research and development pipeline. 

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to consider buying is Telstra. I like the telco giant due to its attractive valuation and the solid progress it is making with its T22 strategy. This strategy is creating a much leaner operation and one which I believe could return to growth in the coming years. Especially given the improving trading conditions in the telco industry and the arrival of 5G internet. The latter could give Telstra’s mobile revenues a major boost in the next few years.

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• CSL shares have underperformed the ASX 200 over the past month. What’s going on?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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