Québec giant Dollarama, which still beats Walmart and Amazon with 50% cheaper products, has been forced to raise its prices by 6% in eight months to stave off inflation.
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“We estimate July 2022 unit price inflation to be around 6% compared to November 2021,” notes Desjardins Capital Markets’ Chris Li, who compared the price of 280 products from retailer Dollarama.
“Higher prices (up to $5) are still very limited and we continue to monitor this closely,” he added.
Health & Beauty (+10.8%), Grocery (+7.2%), Household & Hardware (+7.1%), Kitchen (+7%)… the analyst lists the categories whose prices are in the have risen sharply in recent months.
Despite everything, Dollarama continues to sell products 40% to 50% cheaper than Walmart and Amazon over the same period, with the exception of groceries, notes Chris Li of Desjardins Capital Markets.
“We saw 97 price increases from April in our basket of around 280 items, compared to 25 in April,” he explains.
When it comes to the infamous psychological barrier of $5 products, Dollarama seems to be taking one bite at a time.
Simply in the current context
When Émilie Poitras left a Dollarama in Longueuil yesterday, she had a lot to say about the price explosion in stores.
“Everything is going up, so sometimes it’s a bit difficult to make ends meet,” shared the financial industry technician.
at protocolShe said the increases in groceries were more noticeable, but Dollarama’s prices of certain household items had skyrocketed.
“It’s easier to hold this in the current context because almost everything has increased,” said Bruno Larue, a professor in Laval University’s Department of Agrifood Economics and Consumer Sciences.
“I have the impression that playing yo-yo with the price is not their business model,” he nuances.
On the way to stabilization?
For Maxime Bélanger, President of Groupe Xtreme de Transport International, the fact that transport costs have been falling for two months could soon make consumers happy.
“We have stabilized. It’s not as over the top as it used to be. Prices are starting to fall in several places,” he noted.
“Sea containers had gone from $4,000 to $20,000 or $25,000. Now it’s back down to $15,000 or $20,000,” he says.
According to him, the wind of panic has given way to a certain calm. “We got to know the summit pretty well. Unless fuel costs start to spike again,” he concluded.
Dollarama declined to comment on the analyst’s report yesterday.
Year-to-date, Dollarama shares are up 19.98% to $76.08. The company is worth more than $22 billion on the Toronto Stock Exchange.