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Canadian discount retailer Dollarama has raised its annual comparable sales growth forecast, citing rising demand from budget-conscious shoppers struggling with the higher cost of living. The company now expects comparable sales in Canada to grow between 4% and 4.5% for the full year, up from its previous forecast of 3% to 4%.
Consumers across Canada are increasingly turning to affordable alternatives for everyday essentials. Categories ranging from pantry staples to personal-care products are drawing more shoppers into dollar stores. Dollarama, which sells merchandise at price points of up to $5, has benefited directly from this shift in spending behaviour.
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CEO Neil Rossy pointed to the retailer’s consistent value offering as a key driver of customer loyalty. “At a time when households are making careful spending decisions, customers continued to count on Dollarama for dependable value,” he said.
Strong Second-Quarter Results
Dollarama reported comparable sales growth of 5.4% at its Canadian stores during the second quarter. Customer traffic rose 3.7%, while the average transaction size increased by 1.7%. That compares to 2% transaction growth recorded in the prior quarter.
The company posted quarterly earnings per share of $1.29, beating analyst estimates of $1.25, according to data compiled by LSEG. Second-quarter sales reached $2.03 billion, broadly in line with expectations.
Australia Segment Faces Near-Term Losses
Meanwhile, Dollarama maintained its existing outlook for its Australian operations. The company expects that segment to post a net loss in fiscal 2027. Ongoing investment in business transformation initiatives is driving those near-term costs.
Trade Tensions Add Uncertainty
Renewed trade tensions between Canada and the United States have created additional challenges for retailers. In August, the U.S. imposed 50% tariffs on $27.6 billion worth of Canadian goods. Canada responded with retaliatory levies of 15%, 25% and 50% on $27.6 billion of U.S.-origin imports. Those measures cover appliances, electronics, steel, dairy and agricultural equipment.
Dollarama’s supply chain leaves it exposed to these trade pressures. As of February 1, the company sourced 54% of its Canadian procurement volume from North American vendors in fiscal 2026. The remaining 46% came from direct overseas imports, primarily from China.
Despite the uncertain trade environment, Dollarama’s upgraded forecast reflects continued confidence in inflation-driven consumer demand. The retailer’s discount model appears well-positioned to attract cost-conscious shoppers as financial pressures on Canadian households persist.
