Technology

Dollarama is more competitive than Walmart and Amazon

With a surge in inflation, are you looking for goods at low prices? You can save money by stopping by Dollarama, according to a study by Desjardins.

Like many other businesses, the discount store chain has raised prices over the past year. Analyst Chris Lee of Desjardins Capital Markets calculated that from November 2021 to July 2022, the average growth was 6.2%.

As Neil Rossi, president and chief executive officer of Dollarama, said in March last year, $5 items have begun to appear on the shelves of these retailers, but in very “limited” quantities, according to Desjardins expert. According to him, the company is accustomed to follow the parade when prices need to be raised due to inflation, and not to be ahead.

Against all odds, Desjardins concludes that the prices featured on Dollarama in July 2022 remain more competitive than competitors i.e. Walmart, Amazon, Canadian Tire, Shoppers Drug Mart (Pharmaprix) and No Frills (Loblaw). To reach this conclusion, the financial institution compared the unit prices of approximately 280 items. She says the comparison is “not perfect” but she has tried to find products that are equivalent in quality, size and brand.

Price difference over 40%

The biggest gap was recorded with Shoppers Drug Mart. In the beauty and health department, Dollarama prices are 64.9% lower than in the drugstore chain.

Walmart and Amazon are no exception. For non-food items, Dollarama offers prices 40-50% lower than those of these two American giants. However, things are different in the food department. The average price difference is -2.4% for Walmart, up 4 percentage points in four months, while it reached -16.1% for Amazon.

Dollarama also offers better prices than Canadian Tire (-23.3% in cleaning products) and No Frills (-11.1% in the food department).

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The L’épicerie program held a similar event in the spring of 2021. Its journalists came to a similar conclusion: Dollarama’s prices are lower than those of competitors, in the proportion of 16 to 77%.

Private label products

How does Dollarama manage to fix such inconsistencies? Thanks to private labels, which account for 70% of the products, Chris Lee responds: “In general, we believe that the quality is comparable to that of the big brands.” He adds that in some categories of goods, in particular health and beauty products, the brand is still more important for buyers.

Even if Dollarama offers products at more competitive prices, they are not suitable for all consumers, Desjardins research raises. Those looking for large volumes will not find their account as the items in these discount stores are usually small.

>> See also: Keep track of price accuracy to save money at the grocery store

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