Three Ways to Score With Retail, Restaurant Stocks

• Check to see how long the checkout lines are at different stores. For example, if you went to an Apple(AAPL) store during the last few months, then you could appreciate the strength of the company's sales.
• Ask a few clerks at various stores how business is. You might be surprised how open and chatty they can be.
• Is foot traffic being converted into sales? Count the number of people going into a particular store and the number of people coming out of it with that store's shopping bag.
• Look at the inventory. What items are fully stocked? What items are flying off the shelves? Is the store discounting many products or just a few? Is non-seasonal or aged inventory still on the floor or has it been cleared out?
• Are parents shopping with their children? I find that successful concept stores will have parents shopping with and paying for their kids with their credit cards. Ultimately, parents have both the final say and the means to make large purchases.
• Are the store employees busy or are they milling around and wasting time? An idle staff might be the sign of an idle business.

Finally, don't confuse "good" products with "good" companies. A product might generate a lot of hype and foot traffic, but all that interest still needs to be converted into sales.

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