I can attest that it's possible, but it depends on the circumstances. Obviously, supplementing your stock with other media (DVDs, for example) makes a diff. So does rent. If you own the space -- even with a mortgage/property tax/etc. -- that makes it a lot easier.
That said, unless you're a tried/true corp (like Barnes & Noble, fer inst), I do not understand how a store expects to make money on new records, books and CDs. Even at wholesale cost, you aren't making much money on that stuff, even if the volume is as ridiculous as the people at Rough Trade expect it will be. It's really quite insane to walk into a massive, warehouse-like consumer area in NYC that isn't utilizing every inch of space with salable product when every other store in town is at capacity in this regard. When I went there, their bins were nearly empty, and I could've fucking line-danced (and nearly did) on their sales floor. Place was also somewhat empty on their opening day. Too much money.