Dollarama profits increase as more Canadians shop at discount stores

Montreal-based discount retailer, Dollarama, reported a growth in profit and sales in the second quarter, signalling more Canadians are looking for a deal as the cost of living remains high.

The company’s net earnings increased to $285.9 million compared to $245.8 million in the second quarter last year. The retailer says its net sales rose 7.4 per cent to $1.56 billion compared to a year ago.

Barry Choi, a personal finance expert based in Toronto, says whenever there is a “downturn in the economy” or people have “high record debt levels,” discount stores see record numbers.

“It’s not really a surprise. People tend to tighten up. And their first line of defence is typically dollar discount stores,” said Choi.

A number of shoppers CTV News spoke to outside of a Dollarama store in Calgary say it’s been difficult to make ends meet and they’ve had to be creative to stretch their dollar.

“Shopping wisely and collecting coupons, trying to make it stretch out your food,” said Bonnie Stainbrook.

“I shop every couple of days instead of once a week. I find it’s better and I don’t tend to throw as much away.”

Jenny Hoffos picked up some cleaning supplies for her niece before leaving Dollarama.

“Their prices are decent. You might not get the quality, but for things like cleaning supplies, they’re pretty decent,” said Hoffos.

Other items that have been in demand from the retailer include low-priced essentials like groceries.

Eve and her daughter buy their snack foods at the store.

“Unfortunately, they don’t have fresh produce and milk and necessities. But for treats we do,” she said.

Shoppers say between mortgage or rent payments, car insurance, gas and groceries, there’s not much left in their bank account at the end of the month.

“Unfortunately, with the cost of living, the cost of wages doesn’t go up,” said Eve.

A recent Equifax report shows consumer debt levels rose to $2.5 trillion in the second quarter of 2024, marking a 4.2 per cent increase compared to last year. 

Choi says although inflation has gone down, the cost of living hasn’t decreased because there isn’t deflation.

“I don’t even remember the last time we’ve seen deflation. You know, occasionally you might see gas prices drop a little bit and it tends to last a few days before we see them quickly spike,” said Choi.

“I think Canadians are hoping for deflation, and that’s not necessarily the right answer. They might need to look for other ways.”

Choi says when times are financially tough, people get creative when it comes to making money on the side. He says the number of people taking on side hustles has increased.

“A few years ago, it was maybe only 30 per cent of the population that had a side gig or extra income. Now we’re looking at 50 to 85 per cent, which is an insane number when you think about it.”