Power of the Dollar(store)
A Dollarama opened in my neighbourhood a few months ago. I fell in love after I first step foot into the store. Why? Because the Dollarama was somehow able to find an equilibrium between my tight student budget and my uncanny craving of goods. All the necessities that I need are there for me, for $1, $2, and maximum $3 – a slash in price of 50% or more in comparison to the other goods providers. So what’s so special about the dollar store that I have to blog about it?
Well, it is now Canada’s fastest growing sector in retail. Dollar stores are forcing mainstream merchants such as Walmart, Canadian Tire, and Superstore to rethink their strategic position before they get robbed of their customers. Dollarama Inc. has become a huge threat to these traditional companies; its rapid expansion across the country has attracted large sales increases, an estimate rise of 9 per cent increase annually. Dollarama draws customers with its simplistic layout, convenience and most importantly, low cost. Rivals are retaliating with dollar promotions in hopes of rallying back customers: Canadian tire launched its “Dollar Deal” promotion and Walmart has increased the number of $1, $2, $3 products.
What once was the destested, dirty, dollar store that middle class and well off shopper avoided has become a frequent stop for them. So what exactly is in store for Walmart, Canadian Tire and the lot? How will they cope with the power of the dollar store?
The future seems bright for the Dollar store.
For more information: Browse the Globe and Mail’s article on How Canada’s retailers discounted the rise of the dollar store