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Want to Invest in a Retail Stock? Ask This Question First.

Want to Invest in a Retail Stock? Ask This Question First.

Retail is a tough business in any economic climate. A small number of retailers -- think Costco (NASDAQ: COST) and Amazon (NASDAQ: AMZN) -- manage to build up durable competitive advantages over the course of decades. Consumer electronics retailer Best Buy (NYSE: BBY) goes for around 13 times earnings, department store Macy's (NYSE: M) trades for less than 5 times earnings, and grocery chain Kroger (NYSE: KR) changes hands for roughly 14 times earnings.