The retail industry is facing a host of challenges. Even before the pandemic and subsequent recession struck, it was confronting a changing landscape. This includes online competition from the likes of Amazon (AMZN -0.41%), which offers low prices and speedy delivery on just about any item a consumer wants.

However, you don't have to give up on the entire sector. Certain retailers are in a good position to continue executing their plans and posting strong results. Here are three retail apocalypse-proof stocks that are due for a bull run.

1. Costco

Costco (COST -0.48%) charges members an annual fee to shop at its warehouses. For that fee, they get access to high-quality goods, often sold in bulk, at a low unit price. The membership is loyal, with 91% of U.S. and Canadian cardholders renewing their memberships in each of the last couple of years. Meanwhile, Costco keeps adding paid members, taking its 47.6 million total in 2015 to 58.1 million last year (as of Aug. 30, 2020). Clearly, people find Costco a compelling place to shop.

A crowded floor with people walking in different directions while holding bags.

Image source: Getty Images.

Costco has reported a string of yearly same-store sales (comps) increases. Costco's comps were strong in the first quarter, increasing by over 17% after excluding gasoline price changes and foreign currency translations. Sales from its e-commerce site grew by better than 86% during the period. While online sales were only 6% of Costco's total 2020 sales, it grew quickly last year, helped by the pandemic. Online sales represented 4% of the company's 2019 sales.

Compelling high-quality merchandise and service offerings at attractive prices make Costco a retailer that can more than hold its own in the face of online competition and tough economic sledding.

2. Dollar General

Despite the company's name, Dollar General (DG -0.97%) sells items for more than $1, including some that cost upwards of $10. Still, many of its customers find its prices attractive for consumer staples items like paper towels, toilet paper, trash bags, packaged food, cereals, and even perishables such as milk and eggs. Collectively, Dollar General's consumables category accounts for more than three-quarters of its annual sales. But it also sells other goods like holiday items, toys, and clothing.

With low prices and convenient locations, Dollar General appeals to cost-conscious customers, especially during economically hard times. In fact, the company has been remarkably consistent, producing comps increases for 30 straight years heading into 2020.

When the company reports fourth-quarter earnings results next month, there's no reason to believe it won't run its comps streak to 31 years. Its comps were sharply higher in the first three quarters, including a 12.2% increase in the third quarter, which ended on Oct. 30, 2020. While the pandemic and recession helped boost sales, Dollar General has shown it can shine in any environment by offering low prices that attract customers.

3. Target

Target (TGT 2.19%) distinguishes itself from other retailers by partnering with manufacturers to exclusively offer merchandise at its stores and on the company's website. Rather than fighting the online trend, management is embracing it by investing heavily in technology. This includes various ways for customers to receive their orders.

The combination of select exclusive offerings and providing people with flexibility in ordering and receiving their goods are a powerful combination. While Target's revenue growth was muted heading into fiscal 2020, going from $74.5 billion in fiscal 2015 to $78.1 billion in 2019, this fiscal year's rate has accelerated. Target's fiscal third-quarter (which ended on Oct. 31, 2020) comps grew by 20.7%, with digital sales increasing by 155%, accounting for more than half of the increase.

Providing offerings people want and can't find anywhere else, combined with convenient ordering and delivery options, will keep Target prosperous.

Different paths to success

These three retailers may take different paths, but each looks likely to remain successful. Costco offers members high-quality, attractively priced goods; Dollar General offers low-priced goods on many items, including basic necessities; Target differentiates itself but takes on online competition directly by offering a good online experience. The different roads lead to a good place, however.