Dollarama Rides Wave of Value-Driven Spending as Shoppers Flock to Essentials — Update

By Adriano Marchese

Dollarama said Canadians continued to flock to its stores in the first quarter, driving strong demand for consumables and general merchandise as shoppers search for value.

Canadians are visiting the dollar-store chain more often and spending more when they do, the company said Thursday, extending a trend seen over several quarters as inflation, higher borrowing costs and persistent cost-of-living pressures push consumers toward discount chains. Top on the shopping list are consumables, such as household cleaners, snacks and pantry staples, along with general merchandise like kitchenware, seasonal goods and basic home essentials.

Same-store sales climbed 5.6% in the period, supported by a 3.5% increase in transactions and a 2% rise in average basket size. Dollarama said it continues to lean into everyday essentials and value-priced staples to capture that demand while expanding its store network with 28 net new stores to reach more cost-conscious shoppers in the country.

The continued shift toward value helped lift overall sales for the quarter ended May 3, by 21% to 1.85 billion Canadian dollars ($1.33 billion), topping analyst forecasts.

Costs were higher in the quarter, which pressured gross margins to 43.9%, down from 44.2% a year ago. However, higher sales supported a rise in profit, which reached C$302.3 million, or C$1.11 a share, up from C$273.8 million, or C$0.98 a share, in the comparable quarter a year ago, beating expectations of C$0.99 a share.

Dollarama also reported early traction in Australia, where its newly acquired 410-store network under The Reject Shop banner contributed C$192.8 million in sales. The company recently completed its acquisition of the Australian discount chain, and plans to eventually rebrand all of its stores under the Dollarama name, bringing the same low-cost, high-turnover retail model that has driven its growth in Canada and through Dollarcity in Latin America.

In Latin America, Dollarcity delivered another quarter of rapid expansion, with strong same-store sales and a growing base of stores across the region. The company reported a C$51.2 million contribution to net earnings for the quarter from its 60.1% stake in CARS, which runs stores in Colombia, El Salvador and Guatemala, and its 80.05% stake in ICM, which operates Dollarcity in Peru.

Dollarama said its fiscal 2027 outlook remains unchanged, with steady growth expected in Canada and continued net loss projected from its Australian business as it continues to invest in the new market.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

June 11, 2026 09:23 ET (13:23 GMT)