In the spring, many consumers shopped at Dollarama to buy their chocolates and Easter eggs. With an increase in the number of transactions and the average basket, the Quebec retailer recorded a 20% increase in sales for the first quarter of 2024 ended April 30, the results of which were presented on Wednesday.
After Christmas decorations, Valentine’s Day hearts and Easter chocolate bunnies, Quebec flags and accessories bearing the fleur-de-lys are now taking over the aisles of Dollarama. And for good reason, the sale of seasonal items, which represent 15% of the products offered, contributes in part to the increase in store sales.
“Amid inflationary pressure, we continue to see strong demand for consumer staples, seasonal items and general merchandise. I’m particularly pleased with our performance over the Easter period,” said Neil Rossy, President and CEO of Dollarama, during a conference call with financial analysts on Wednesday.
So while many consumers are turning to Dollarama to lower their grocery bills, the secret to this performance lies in the mix: food, a variety of seasonal items, and consumer goods used in everyday life, according to Rossy. There is strong demand in all three categories.
Asked about the price war the competition might be engaging in, Mr. Rossy was adamant: “We don’t react to promotional activities. If they decide to have horrible margins on a loss leader, that is their business decision. We have an everyday low price strategy. »
He even hinted that the school items offered in his stores as the start of the school year approaches could be more expensive than at some of his competitors. “For 11.5 months, we are more affordable,” he added.
Moreover, the gradual introduction of items displayed at the price of $5 and the increase in the number of stores – from 1,431 last year to 1,507 – also explain the performance of the retailer. Rossy said the company is aiming for a total of 2,000 stores by 2031.
Thus, in light of the results for the first quarter of 2024, Dollarama recorded a 17% increase in comparable store sales, a 15.5% increase in the number of transactions and a 1.4% increase in the average amount of invoices.
Is this increase due to the arrival of new customers in the yellow and green branded discount stores, or are regulars spending more there? asked an analyst.
A mixture of both, answered Neil Rossy. “We are working both to keep the ones we have and to attract new ones to our stores. »
Thus, the net profits made by the company amounted to 179.9 million, against 145.5 million for the same period last year. Sales reached 1.29 billion, compared to 1.07 billion in the same quarter last year. Diluted earnings per share increased 28.6% to $0.63 from $0.49.
Founded: 1992
Turnover (2022): 5 billion
25,840 employees across the country
1507 stores
Headquarters: Mount Royal