The retail sector is in a huge state of change at the moment.
Amazon has just opened its Australian website, which puts internet shopping at the forefront of everyone's minds.
A number of retailers have falling sales and are closing stores, such as Myer Holdings Ltd (ASX: MYR). So it might be best just to avoid the retail sector altogether.
However, I don't think every retail business needs to show the white flag just yet. There are a few that are actually growing and could offer investors market-beating returns.
I think Greencross Limited (ASX: GXL) is one of those few retailers worth a closer look.
Greencross is the largest pet business in Australia with its Petbarn stores and Greencross vets.
Petbarn is cleverly replicating the model that works so well for Bunnings, by offering everything a pet owner could want under one roof.
One of the good things about Petbarn is that it offers a number of private label items that can't be sold by a competitor. In FY17 over 20% of sales were private label sales.
Petbarn is tapping into the growth of the pet industry nicely. At the start of FY17 it had 221 stores and by the end of the year it had 239 stores.
Greencross isn't just growing through expansion, the like-for-like (LFL) sales growth is also impressive. Australian retail LFL sales growth was 4.3%, Australian vet LFL growth was 4.8% and group LFL growth was 4.5%.
A key strategy for Greencross is its co-location strategy. This is where a Greencross vet is installed inside a Petbarn. It should save on costs and help both businesses cross-sell to each other's customers, which should boost sales.
I think Petbarn's sales should be fairly safe from the factors affecting other retail businesses. Petbarn is growing its own retail sales strongly. A lot of its products are essential pet items, Petbarn is serving as a pet supermarket for a lot of people, which should make its sales quite defensive.
Foolish takeaway
Greencross is currently trading at 16x FY18's estimated earnings with a grossed-up dividend yield of 4.51%. I think it's one of the best retail shares out there and is currently trading at an attractive value.
