Dollarama sales soar as more Canadians turn to discount retailer for groceries
Dollarama saw significant growth in its second-quarter profits as more Canadians are turning to the discount retailer for cheaper grocery items.
The Quebec-based dollar store chain said its sales for the second quarter of the 2024 fiscal year increased by 19.6% to $1.45 billion, compared to $1.21 billion in the same period last year.
In a news release published earlier this week, Dollarama also stated its comparable store sales were up by 15.5 % compared to 13.2% growth last year.
The company’s increase in sales is due to the growth in its total number of stores and a “higher than historical demand for consumables” due to soaring grocery prices at other retailers.
Dollarama added 18 new stores between July 2022 and 2023, bringing its total to 1,525.
“Our performance year to date for this fiscal year reflects our differentiated ability to provide compelling value across our broad product mix and a consistent shopping experience,” said Dollarama President and CEO Neil Rossy.
“Dollarama continues to deliver unparalleled value to a growing number of consumers seeking affordable everyday products at low price points, and we expect this strong demand to persist through the second half of the year in the current macro-economic context.”
Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University, told Daily Hive that Dollarama’s rising popularity can be tied to Canadians’ “looking for options to save money.”
“Dollarama [now has] 1,500 stores nationwide, so a huge network. People know that they can find deals there,” he said.
Charlebois noted that when it comes to food, Dollarama isn’t offering customers a vast selection of products like larger grocery chains.
“Its business model is very lean. They keep things tight with operational costs. And so that’s why typically when Dollarama sees more traffic, they see more profits,” he said.
This also ties into how Dollarama can keep its prices on some name-brand items lower than large grocery retailers, he explained.
The limited selection is due to Dollarama offering “suppliers a shelf monopoly,” explained Charlebois.
That’s why at a Dollarama, you may find one or two name brands of a particular grocery item and perhaps one knockoff item, “but that’s about it,” he said.
“A lot of people think that at Dollarama, you’ll only see… knockoffs. That’s not true at all. You’ll actually find even Canadian-made foods at a discount. And the only way that they’re able to do that is because they are engaged with one supplier offering one type of product, and that’s it,” noted Charlebois.
“While you go elsewhere, at Loblaws and Sobey’s and Metro, you’re… paying for convenience; you’re paying for Galen Weston on TV; you’re paying for a lot of things.”
Recently, Canadians shared what they believe is worth buying at Dollarama, and it ranged from kitchen supplies to craft items and more.
Have you been shopping at Dollarama to save money on grocery and household items? Let us know in the comments.