“It’s just a small part of our business,” Neil Rossy told analysts on a conference call Wednesday (Sept. 11), where he was asked concerning the company’s grocery products and people of competitors operating in the identical space.
“We will keep an eye on all retailers – just like all retailers keep an eye on us – to make sure we are competitive and know what is out there.”
Competition for food income is increasing
As consumers have increasingly sought out bargains over the past decade, Dollarama has expanded its grocery offerings to incorporate bread and staples resembling cereal, rice and pasta at supermarket-level prices or below.
However, competition within the discount segment of the market through which Dollarama operates has recently intensified when the country’s largest grocery chain began piloting a brand new ultra-discounter.
The no-name stores that Loblaw Cos. Ltd. is testing in Windsor, St. Catharines and Brockville, Ontario, are 20% cheaper than competing discounters resembling No Frills. The grocery giant can achieve these cost savings by counting on a smaller store footprint, fewer refrigerated products and a wealthy assortment of no-name goods.
Although Rossy dismissed the notion that his company is a challenger to supermarkets, grocers haven’t disappeared from his radar. “All retailers in Canada are aware that everyone is each other’s competition on every item or every category,” he said.
Rossy declined to reveal the extent to which the chain’s sales overlap with those of Loblaw or the grocery division, arguing that Dollarama’s strength lies in its enormous product variety, not in grocery products alone.
“What makes Dollarama Dollarama is a very broad assortment of different departments that are a little bit like the old local general store,” he said.
