Tuesday , January 23 2018

Retail crisis nowhere in sight for Canada’s Dollarama

Bloomberg

The crisis afflicting much of the retail industry has spared dollar stores in Canada, where industry leader Dollarama Inc. keeps opening new locations and improving profit margins.
Canada’s largest dollar-store chain posted earnings that topped analysts’ estimates last quarter and raised its gross-margin forecast for the year.
While the Montreal-based company added 17 net new locations, part of the boost came from a 6.1 percent increase in comparable-store sales.
Dollarama is growing faster than US dollar-store chains, helped by a Canadian market that’s less saturated than its southern neighbour and an longstanding policy to stay away from fresh food. The success of new items priced $2.90 to C$4, efforts to boost productivity and a penny-pinching approach to business emboldened the company to ramp up its expansion plans earlier this year. The stock is up 30 percent this year.

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