Canada remains retail chain’s ‘only priority’

Continued from FP1

“The acceptance of $3.50 to $4 price points has been better than expected, (but) the buying group is still fully focused on the $1 and $1.25 price points as much as possible,” Rossy said, noting Dollarama’s merchandise buyers reserve the purchasing of higher-ticket goods for a selection of in-demand items only available at a higher price point from manufacturers.

Dollarama also raised its guidance for this fiscal year, hiking its anticipated gross margin to a range of 37.5 per cent to 38.5 per cent versus a prior estimate of 37 per cent to 38 per cent and an operating earnings increase of 22 per cent to 23.5 per cent, up from a previous outlook of 21.5 per cent to 23 per cent.

A pilot test of credit cards found consumers bought more when they made credit card purchases and offset the additional merchant costs of making credit card payments using Visa, American Express and MasterCard, said chief financial officer Michael Ross. “People are buying more at a given time,” he said.

Dollarama, which began accepting debit cards across the country in 2008, said debit card penetration of sales increased to 51.4 per cent in the fourth quarter compared with 49.2 per cent in the same quarter of 2016.

“Dollar stores do not have as much market penetration in Canada as they do in the U.S., which largely explains