Dollarama reports higher Q2 profit as shoppers look for savings on essentials

“It’s only one small a part of our retailer,” Neil Rossy instructed analysts on a Wednesday name (on Sept. 11), the place he was questioned concerning the firm’s meals merchandise and rivals taking part in in the identical area.

“We are going to keep watch over all retailers—like all retailers keep watch over us—to ensure that we’re aggressive and we perceive what’s on the market.”

Competitors for grocery {dollars} is rising

Over the past decade and as customers have extra not too long ago sought offers, Dollarama’s meals merchandise has expanded to incorporate bread and pantry staples like cereal, rice and pasta bought at costs on par or under supermarkets.

Nevertheless, the competitors within the {discount} phase of the market Dollarama operates in intensified not too long ago when the nation’s greatest grocery chain started piloting a brand new ultra-discount retailer.

The No Identify shops being examined by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20% cheaper than {discount} retail opponents together with No Frills. The grocery large is ready to provide such price financial savings by counting on a smaller retailer footprint, fewer chilled merchandise and a hearty vary of No Identify merchandise.

Although Rossy disregarded notions that his firm is a grocery store challenger, grocers aren’t off his radar. “All retailers in Canada are life like about the truth that everyone seems to be everybody’s competitors on any given merchandise or class,” he mentioned.

Rossy declined to disclose how a lot of the chain’s gross sales would overlap with Loblaw or the meals class, arguing the huge number of objects Dollarama sells is its power moderately than its grocery merchandise alone.

“What makes Dollarama Dollarama is a really large assortment of various departments that considerably symbolize the previous five-and-dime native comfort retailer,” he mentioned.