Even as U.S. President Donald Trump’s tariffs cause economic uncertainty, business appears to be booming for one Canadian company – Dollarama.
As of Monday, Dollarama’s stock price is up 34 per cent compared with the start of the year. Compared with this time last year, the stock was up 39 per cent.
Compared with five years ago, the stock price was up 271 per cent.
So why is Dollarama’s stock skyrocketing at a time of economic uncertainty?
“It’s in the name itself,” said Moshe Lander, economist at Concordia University.
Consumers will always look for ways to save money during an affordability crisis or economic downturn, Lander said.
“What they’re effectively advertising in the name is that if you come here, you’re going to get more for less. And that’s really what people are looking for right now,” he said.
The high price of groceries in Canada is enticing people to look for cheaper options at discount stores like Dollarama, University of Guelph food economist Mike von Massow said.“Dollarama is strategically doing a couple of things, (such as) adding food products to their line and therefore giving people a wider range of options to come into the store for,” von Massow said.
The company has said “consumables” are driving the company’s recent growth.
“Consumables were once again a driver behind our sales with general merchandise and seasonal remaining stable,” Dollarama CEO Neil Rossy told investors during an earnings call in August.
Consumables can be anything from food items to goods like shampoos, soap and fast-moving consumer goods.
“Walmart, Loblaws, everybody understands how competitive the environment is at this point in time with the instability and customers focus on consumables and their base needs,” Rossy added.
