Canadian shoppers turn to discount retailers to fight inflation

As Canadians struggle to make ends meet amid an ongoing cost-of-living crisis, more people are turning to discount chains to hunt for bargains as they seek financial relief.

On Wednesday, discount store Dollarama posted a spike in profits in the last quarter. As of July 30, the Montreal-based company reported making $245.8 million, up from $193.5 million in revenue compared to the same time last year.

“The increase in comparable store sales is primarily attributable to higher sales across the corporation’s product categories, including continued higher than historical demand for consumables,” its financial report stated.

Consumables include things like food and household cleaning products.

CityNews asked people who shop at discount retailers how they’re coping. Many told us they have no other choice.

“Every penny counts right now,” said one woman.

“I don’t know if Dollarama… is upstanding, necessarily, because they are a corporation that also has their own faults, but I do believe that all around, all the stores should be passing part of their profits back to the consumer and making their prices lower.”

Meanwhile, Carrie isn’t sure she’s always getting a deal.

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“When Dollarama first started, I think the prices for goods were lower than grocery stores [but] lately I’m finding some of their goods, their name brand goods, are almost at par with the grocery stores,” she pointed out. “You may think it’s a better deal, but when you look at the packaging, the packaging is maybe a bit different, but it’s the same. I don’t find there are savings.”

Vilma says she regularly shops at discount stores, including for groceries.

“We usually go to Superstore… but we tend to buy here — it’s much more cheaper. Quality-wise, it’s almost the same,” adding that she will go out of her way to shop there, instead of at a bigger retailer.

Patricia says she’s finding any way possible to save money right now.

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“It used to be really cheap, but now everything is like two dollars, three dollars — [and] it’s increasing as well, but still, I save money for sure.”

Dollarama’s chief executive claims the launch of a new five-dollar price point has been “well accepted” by shoppers.

Neil Rossy insists customers’ willingness to pay a bit more for items stems from his company’s careful timing around increases and focus on ensuring any higher price points are still driving “great relative value.”

“We don’t like to add price points until we really feel pressured,” he said on a call with analysts on Wednesday. “Each time we do that because we wait so long and we spend so much time preparing, it’s been well accepted.”

-With files from Ben Bouguerra and The Canadian Press