More inflation-stricken consumers than ever are turning to discount stores in search of bargain prices.
• Also read: Paid Fighting Inflation: Dollarama CEO’s Compensation Skyrockets 36%
That search for discounts helped Canadian discount giant Dollarama soar its sales by 20.7% in the quarter ended April 30.
Profit reached $179.9 million compared to $145.5 million in the year-ago quarter, an increase of 24%.
On sales of $1.3 billion, that’s a margin of nearly 14%.
Not just food
With food prices rising faster than inflation for months — 9.1% for groceries and 4.4% for April inflation — consumers are looking for ways to cut their bills.
But the Montreal chain, which sells specific items like cereals and snacks, says demand is strong across all of its categories, including seasonal items and everyday items.
The average chain customer basket grew by 1.4%, which is not much. Most notably, the number of transactions has skyrocketed, up 15.5%.
Overall, like-for-like store sales increased by 17.1%.
Comparable sales are an important indicator in retail as they exclude sales from newly opened stores.
And at Dollarama open shops. In the last three months alone, the company has added 21 new employees.
With currently 1,507 parking spaces, the stated goal is to have 2,000 by 2031.
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