Price increases of 6% in eight months at Dollarama

Price increases of 6% in eight months at Dollarama

UPDATE DAY

Quebec giant Dollarama, which still beats Walmart and Amazon with 50% cheaper products, was forced to inflate its prices by 6% in the space of eight months to stave off inflation.< /strong>

“We estimate unit price inflation at around 6% in July 2022 compared to November 2021,” notes Chris Li of Desjardins Capital Markets, who compared the price of 280 products from the Dollarama retailer.

“Higher prices (up to $5) are still very limited and we continue to monitor this closely,” he added.

< p>Health and beauty products (+10.8%), food (+7.2%), home and hardware (+7.1%), kitchen (+7%)… the analyst lists the categories, which have seen their prices soar in recent months.

Despite everything, over the same period, with the exception of food, Dollarama continues to sell products 40% to 50% cheaper than Walmart and Amazon, points out Chris Li, of Desjardins Capital Markets.

“We observed 97 price increases compared to April in our basket of approximately 280 items, compared to 25 in April”, illustrates- he.

When it comes to the infamous psychological barrier of $5+ products, Dollarama seems to be taking it one bite at a time.

Easy in today's environment

Yesterday, on leaving a Dollarama in Longueuil, Émilie Poitras had a lot to say about the explosion of prices in stores.

“Everything goes up, so sometimes it's a difficult to make ends meet,” shared the technician working in the financial sector.

Dollarama price increases of 6% in eight months

Price increases of 6% in eight months at Dollarama

In the Journal, she said that the increases are more visible in groceries, but that at Dollarama, the price of certain household products had jumped.

“It's easier to pass that in the current context because almost everything has increased,” said Bruno Larue, professor in the Department of Agri-food Economics and Consumer Sciences at Laval University. 

“I have the impression that it is not their business model to play yo-yo with their price”, he nuances however.

Towards stabilization?

For Maxime Bélanger, president of Groupe Xtreme de transport international, the fact that transport costs have been falling for two months could soon smile on consumers.

“We have stabilized. It's not as over the top as it used to be. Rates are starting to drop in several places,” he noted.

“Sea containers had gone from $4,000 to $20,000 or $25,000 US. Now it's back down to $15,000 or $20,000 US,” he says.

According to him, the wind of panic has given way to a certain lull. “We got to know the peak quite well. Unless fuel costs start to skyrocket again,” he concluded.

Yesterday, Dollarama would not comment on the analyst's report.

< p>Year-to-date, Dollarama shares have jumped 19.98% to $76.08. The company is worth more than $22 billion on the Toronto Stock Exchange.

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