To help offset the impact of inflation, Dollarama (DOL), Canada's largest dollar store, is introducing a new $5 price tag on many items it sells.
Dollarama said the roll out of additional price points up to $5 will help the retail chain maintain and enhance its product assortment and value.
“There will be a gradual ramp up starting mid-year and becoming more noticeable through the second half of the year,” Neil Rossy, Dollarama’s President, said during a call with analysts.
Rossy’s comments came as the retailer raised its dividend and reported its fourth-quarter profit and sales rose compared with a year earlier.
Dollarama raised its quarterly dividend by 10% to $5.53 per share, up from $5.03 a share previously.
The company reported a profit of $220 million or $0.74 per diluted share for the quarter ended January 30 compared with a profit of $173.9 million or $0.56 per diluted share a year earlier.
Sales totalled $1.22 billion, up from $1.1 billion in the same quarter last year, helped by an increase in the number of stores and a 5.7% uptick in comparable store sales.
Looking forward, Dollarama said it expects to benefit from a more upbeat sales environment in the coming months compared with the same period last year when pandemic restrictions limited non-essential shopping.
However, the company cautioned that supply chain and other inflationary pressures are expected to be felt more acutely this year.
Dollarama opened 24 net new stores in the quarter, for a total of 1,421 stores at the end of January. The company’s stock has risen 12% year to date to $71.19 a share.
