The retail industry is going through a tumultuous four years of never-before-seen shockwaves. First, the pandemic justified the government to shut down the economy, causing many retailers to go bankrupt. After reopening, those that remained briefly benefited from the spurt of “revenge shopping” by consumers who used the stimulus checks the government handed out.

Unfortunately, that ignited the highest level of inflation the country has seen in 40 years, followed by the fastest ratcheting up of interest rates ever recorded. The Federal Reserve hiked rates 11 times in 2023.

With inflation unrelenting, the Fed is in no mood to cut rates. It means retailers will have to contend with a higher-for-longer policy that leaves consumers in no mood to spend money beyond necessities.

With that backdrop, it may seem the retail sector is no place to shop for stocks. Yet, if you know where to look, you can find good retail stocks to buy hidden amongst the wreckage. They will thrive for years and generate fantastic returns for your portfolio.

Walmart (WMT)

Any discussion of retail stocks to buy now must start with Walmart (NYSE:WMT). Deemed one of the premier essential businesses during the pandemic, the retail king could keep selling groceries and goods when its rivals were forbidden. In the ensuing economic chaos that followed, Walmart remains a location for consumers to shop. 

The need for everyday low pricing has the retailer’s sales soaring. Sales jumped 6% from last year to $161.5 billion, easily beating Wall Street’s expectation of $159.6 billion. Adjusted profits also beat the Street, coming in at 60 cents per share compared to estimates of 53 cents. Consumers are buying more goods more often, leading Walmart to steal market share from its rivals.

CEO Doug McMillon told analysts, “These are not inflation-driven results.” Consumers are simply responding to Walmart’s value proposition. 

Although Walmart’s stock will be 24% higher in 2024, investors should not miss out on buying the biggest, most important retailer.

LVMH Moet Hennessey Louis Vuitton (LVMUY)

Luxury retailer LVMH Moet Hennessey Louis Vuitton (OTCMKTS:LVMUY) should be the second retail stock to buy this month. The owner of Louis Vuitton, Dior, Tiffany and other prestigious high-fashion brands, the retailer has performed better than most aspirational luxury or mass merchandise retailers. That’s because the wealthy tend to be hit last regarding inflationary impacts. They can spend their way through a downturn.

Yet even the rich have their limits. First quarter revenue fell 2% to 20.7 billion euros, or $22 billion. But that was more the result of growing at a breakneck, record pace in 2023 than the well-to-do pulling back. Organic growth was up 2% in the U.S., its largest market, but down 6% in Asia, its second-largest.

That creates an excellent opportunity for investors looking for retail stocks to buy now. LVMH’s stock is essentially at the same level at which it started the year. Because the retailer was going up against tough comparables, results didn’t look as good as they otherwise would. That means LVMH stock is trading at a discount to its future growth prospects. It also pays a dividend raised for ten years, running at a 12.6% compounded annual growth rate (CAGR). Investors can get paid for buying ahead of the turnaround to come.

Costco (COST)

Warehouse club Costco (NASDAQ:COST) makes the list of retail stocks to buy now for many of the same reasons as Walmart. It is an essential retailer that delivers value for the money. Unfortunately, its stock has not pulled back like LVMH; otherwise, buying would be an extra opportune time.

Still, even though Costco stock is at an all-time high, investors have done well owning it no matter when they bought it. Over the past decade, COST stock returned 763% for shareholders, compared to a 238% return for the S&P 500. That’s better than a threefold gain for the warehouse club.

More growth is on the way. Costco is poised to raise its membership fees soon. Although it hasn’t announced a date, it typically does so every five or six years. It’s been seven years since the last increase, so we’re due. While it likely won’t be very much — management has said it is mindful of how consumers are struggling — virtually every dollar will flow through its financial statements to the bottom line.

Costco ended the first quarter with 132 million cardholders and $73.4 million paid memberships. Even a $5 increase would generate a significant influx of revenue. And membership fee revenue rose 8% in Q1 to $1.1 billion as more consumers rushed to shop at the bulk merchandise warehouse. That makes Costco a retail stock to buy.

On the date of publication, Rich Duprey held a LONG position in LVMUY stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.