Dollarama buys land for Calgary warehouse, targets 2,200 stores in Canada by 2034

globalnews.ca:

A new Dollarama distribution centre and a lot more of the chain’s stores are headed for Canada over the next decade.

The retailer announced Wednesday that it had spent $46.7 million to buy land in Calgary, where it plans to build a warehouse and distribution centre to service Western Canada.

The deal is slated to close in the fourth quarter of the company’s fiscal 2025 and the site is expected to be in operation by the end of 2027.

Looking even further out, Dollarama said it would expand its Canadian store network to 2,200 locations by 2034. The Montreal-based company said that store count was an increase from its prior goal of opening 2,000 stores by 2031. It currently has 1,541 locations.

The company decided to up its goal and open the centre “in light of the positive customer response to our value proposition year after year and following a re-evaluation of our market potential in Canada,” Neil Rossy, Dollarama’s chief executive, said in a statement.

The 200-store increase over three years works out to about 67 new stores per year, which Desjardins analyst Chris Li said makes it “right in line” with the current annual average of 60 to 70 stores per year.

He pointed out the distribution centre will be Dollarama’s second and should help it optimize its warehousing and distribution operations and support its growth plans while generating cost savings.

Irene Nattel with RBC Capital Markets felt similarly.

“In our view, (the) decision to add a second logistics hub in Western Canada makes a great deal of sense given growth in store count and geographic footprint, but as well from a security of supply/service perspective,” she wrote in a note to investors.

Dollarama’s announcements came the same day it reported a