The Globe and Mail reports in its Thursday edition that Dollarama raised its sales-growth forecast as cautious consumers increasingly turn to discount stores, boosting the retailer's sales and profit.
The Globe's Susan Krashinsky Robertson writes that chief executive officer Neil Rossy says: "During difficult times, the consumer has less money to spend. It's that simple. By the same token, during difficult times, the consumer trades down, and that can benefit Dollarama."
Dollarama reported that comparable sales grew by 5.4 per cent in the second quarter ended Aug. 2. That exceeded analysts' expectations of 4.2-per-cent sales growth.
Stifel analyst Martin Landry said the result bucked wider trends in the industry. He cited other retailers that have reported "decelerating trends in comparable sales growth," including Costco Canada, TJX Canada and some Canadian grocers.
Dollarama's growth was driven both by an increase in the number of transactions at the stores and the amount that customers bought during each visit.
It now expects its comparable sales growth for this fiscal year to be in the range of 4 per cent to 4.5 per cent, up from its previous guidance of 3 per cent to 4 per cent, which was issued in March.
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