Strong October retail sales, boosted by discretionary spending and a growing savings buffer, likely extended to November to support a "more positive" retail outlook, Jarden Research said in a Monday note.

Spending exceeded expectations during Cyber Week, indicating stronger-than-anticipated sales and continued consumer willingness to spend during the holiday season, the investment firm said. The intense promotions during Cyber Week were strategically designed to maximize gross profit per transaction, it added.

Jarden Research expects the retail market growth to accelerate through 2025, driven by rising produce inflation and a recovery in volumes as consumers shift back to eating at home.

The investment firm also believes that there is a need for local consolidation in the Australian retail sector and forecasts that the market will bifurcate, with Wesfarmers (ASX:WES) and the Woolworths Group (ASX:WOW) best positioned to maximize long-term profits and return on invested capital.

In addition, Jarden Research said that JB Hi-Fi (ASX:JBH) and Harvey Norman (ASX:HVN) results benefited from the building momentum in the electronics sector, which likely continued through November.

Shares of JB Hi-Fi rose nearly 1% in recent Friday trade, while shares of Woolworths Group fell almost 1%.

Price (AUD): $30.07, Change: $-0.15, Percent Change: -0.51%