Retailers are adapting their business models as technology changes how people shop. Still, demand can be volatile as the industry is exposed to the ups and downs of consumer spending. This has stirred some uncertainty lately as retail stocks have tumbled by 15.8% over the past six months. This performance was particularly disheartening since the S&P 500 held steady.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one consumer stock poised to generate sustainable market-beating returns and two we’re swiping left on.

Two Consumer Retail Stocks to Sell:

Dollar General (DG)

Market Cap: $17.38 billion

Appealing to the budget-conscious consumer, Dollar General (NYSE:DG) is a discount retailer that sells a wide range of household essentials, groceries, apparel/beauty products, and seasonal merchandise.

Why Is DG Not Exciting?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations

2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 29.9% that must be offset through higher volumes

3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Dollar General’s stock price of $79 implies a valuation ratio of 13.5x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than DG .

Grocery Outlet (GO)

Market Cap: $1.17 billion

Due to its differentiated procurement and buying approach, Grocery Outlet (NASDAQ:GO) is a discount grocery store chain that offers substantial discounts on name-brand products.

Why Does GO Give Us Pause?

1. Already-low operating margin of 2.4% fell over the last year, and the smaller profit dollars make it harder to react to unexpected market developments

2. Below-average returns on capital indicate management struggled to find compelling investment opportunities

3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Grocery Outlet is trading at $12.01 per share, or 12.9x forward price-to-earnings. Read our free research report to see why you should think twice about including GO in your portfolio, it’s free .

One Consumer Retail Stock to Watch:

Ross Stores (ROST)

Market Cap: $40.98 billion

Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.