As one of the fastest-growing sector in Canadian retailing, dollar stores are seen as threats by retailers including WalMart, Target, and Canadian Tire. As the Canadian market leader Dollarama Inc. expands aggressively and is now appealing to middle-class as well as the upper-class, retailers are panicking. Dollar store sales have risen drastically, approximately 9% every year since 2009. The appeal of convenience, simplicity and low prices are drawing consumers back for repurchasing.
Walmart and Canadian Tire tried to recapture customers who drifted to Dollar Store by having promotions such as the “dollar deal” Canadian Tire ran recently. Walmart tried to reorganize their shelves to have a $1, $2, and $3 shelves.
The threat of dollar stores has become a big concern for retailers, and it is not hard to see why. With the low prices of items ranging from necessitates to more luxurious items, customers are being drawn to the stores. I believe that Walmart and Canadian Tire should not focus on trying to beat the prices of Dollar store as they had by trying to match their prices. Walmart and Canadian Tire or any other retail store that are threatened by the low retail pricing store should focus on providing a fair price for good quality items. Given that prices for dollar store products are immensely low, the low cost will result in a product that is not of very high quality. Therefore instead of trying to compete with dollar store on a price level, other retail stores should focus on providing a higher level of quality for their products at a fair price.