“It's just a small part of our store,” Neil Rossy told analysts on a call Wednesday (Sept. 11), where he was asked about the company's food sales and competitors playing in the same space.
“We're going to look at all the vendors—just like all the vendors are looking at us—to make sure we're competitive and we understand what's out there.”
Competition for grocery dollars is increasing
Over the past decade and with shoppers increasingly looking for deals, Dollarama's food merchandise has expanded to include bread and cereal, rice and pasta at or below supermarket prices.
However, competition in the discount segment of the market Dollarama has been working hard lately when the country's largest department store began testing a new discount store.
No Name stores being tested by Loblaw Cos. Ltd. Windsor, St. Catharines and Brockville, Ont., are billed as 20% cheaper than discount competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a small store footprint, a few cool products and a hearty list of No Name merchandise.
Although Rossy has dismissed the notion that his company is a supermarket challenger, consumers are not off his radar. “All retailers in Canada are honest about the fact that everyone is everyone's competition in any product or category,” he said.
Rossy declined to disclose how much sales will surpass Loblaw or the food division, saying that Dollarama's bulk sales are due to its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very broad combination of different departments that somehow represents the old five-and-a-half-inch local grocery store,” he said.
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