Dollarama CEO warns on price pressures that could be passed to consumers
If domestic manufacturers and suppliers keep pushing their prices up on food and several household goods, Dollarama Inc.’s chief executive says retailers will have no choice but to pass the increases on to customers.
“Retailers are doing their best not to push those costs on to the consumers, but retailers can only absorb so much,” Neil Rossy told analysts on a conference call Wednesday to discuss the retailer’s latest results.
He said the increases have come from the consumables category, which Dollarama defines as paper, plastics, foils, cleaning supplies, basic health and beauty care products, pet food, confectionary, drinks, snacks and other food products.
General merchandise, which runs the gamut from party supplies to greeting cards and electronics and kitchenware, hasn’t seen the same shift in pricing pressures, Rossy added.
His remarks come as Canadians have been grappling with rising costs for the last two years, putting a strain on budgets and causing some to adopt more price-conscious behaviour.
Their approaches to shopping are being shaped largely by high interest rates and inflation, which eased considerably over the last year, reaching 3.1 per cent in October, but remains above the Bank of Canada’s target of two per cent.
But inflation has had some positive impacts for Dollarama as customers have been drawn to the Montreal-based chain’s lower prices, bringing added foot traffic and purchases to its stores.
The retailer said Wednesday that it earned $261.1 million or 92 cents per diluted share for the 13-week period ended Oct. 29, up from a profit of $201.6 million or 70 cents per diluted share a year earlier.
Sales totalled $1.48 billion, up from $1.29 billion in the same quarter last year.
Dollarama
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