(Montreal) Grocers have intensified their offensive against Dollarama, which is experiencing a resurgence in popularity in a context of high inflation, notes the boss of the Montreal retailer.
“In the consumer goods sector, we see that the market is more competitive,” comments President and CEO Neil Rossy during a conference call Wednesday with financial analysts. I would even say, extremely competitive. »
At a time when household grocery bills continue to rise, the Montreal retailer is benefiting from strong traffic. The brand has even become a popular topic on social media where influencers discuss the non-perishable food offering at Dollarama.
Even if grocery retailers have decided to “fight back” on the price front, there is a limit to what the industry can do to ease the burden on consumers, Mr. Rossy believes. “It’s really a difficult situation. Manufacturers continue to push prices upwards. Retailers are doing their best not to pass the bill on to consumers, but there is a limit to what they can absorb. »
These comments come at a time when large Canadian grocers are under federal pressure to reduce their prices. Dollarama was not targeted by the government’s actions.
In Canada, food inflation fell from 8.3% in June to 5.6% in October, according to Statistics Canada data.
Dollarama stores are busier at a time when consumers are monitoring their spending and are more sensitive to the prices of the products they consume.
The Montreal company says the number of in-store transactions jumped 10.4% in the third quarter ended October 29. That popularity helped comparable sales, which exclude store openings and closings, jump 11.1%.
Its net profit thus stood at 261.1 million, which represents an increase of 31.4%. Diluted earnings per share are 92 cents. Revenues, for their part, increased by 14.6% to 1.5 billion.
Before the results were released, analysts expected earnings per share of 86 cents and revenue relatively similar to those posted, according to financial data firm Refinitiv.
Dollarama shares were down 46 cents, or 0.46 per cent, at $98.62 on the Toronto Stock Exchange around midday.