DOLLARAMA
DOLLARAMA
DOLLARAMA
INC
COMPANY OVERVIEW
Dollarama is a Canadian chain of retail stores selling a variety of everyday products, including
household essentials, party supplies, stationery, health, beauty, toys and snacks. The company is best known
for its selection of inexpensive items at low prices. At the present, they are the largest Canadian dollar retail
store chain with more than 1000 stores spread across the country. It was founded by Larry Rossy, the
grandson of a Lebanese immigrant who inherited it from his father. Although Dollarama was established in
1992 by Larry Rossy a grandson of Salim Rossy, Salim Rossy's is credited for establishing the first shop, S.
Rossy Inc. shop in 1910, the birth of Dollarama . When Larry Ross took over as the business's CEO in 1973,
the business's operations had steadily grown, and by 1992, the business had more than doubled the shop
chain form twenty to forty-four outlets.It has its headquarters in Montreal Canada
All the retail establishments are situated in a city or a small town in a different province of Canada. They are
Dollarama exists to deliver a convenient and enjoyable shopping experience to its customers through its well-
organized stores, friendly staff, and efficient checkout process. The organization strives to be a responsible
and ethical corporate citizen by operating sustainably, supporting its employees, and giving back to the
community.
Mission statement
Our mission is to provide our customers with everyday products at affordable prices while delivering a
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Core Values
Quality: We are committed to providing the best quality products and services to our customers.
Reliability: We believe in developing long-term relationships based on trust, integrity and honesty with
Innovation: We will constantly look for ways to improve ourselves and our products/services based on
customer feedback and other factors beyond our control (e.g., technology).
Customer-oriented: We put our customers first and strive to provide exceptional value and service. The
company is committed to offering timely and affordable products that provide excellent value for the
price in a respectful manner. The approach has helped in building a strong reputation as a discount
retailer
Customer service: We will provide excellent customer service to all of our customers, whether it be by
Responsibility: We believe that we have a responsibility to make the world a better place for everyone by
doing things such as recycling, helping others and contributing back to society in general through
volunteering activities like working at Habitat for Humanity or donating used items for resale at a thrift
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Porter’s Five Forces
Firstly, Dollarama competes in an extremely competitive marketplace for basic discount household goods,
these include a large number of privately held multi-outlet chains, privately run dollar stores, discount
retailers, and mass merchants. These retailers and Dollarama compete for the same customers, workers, store
locations, goods, and services. A Buck or Two, Dollar Giant, Dollar Store with More, Everything for a
Dollar, and the Great Canadian Dollar Store are a few of the company's immediate rivals (Appendix B). Due
to poor brand identification and distinctiveness of products, low customer conversion costs, low product
complexity, high rival discontent with market position, and low obstacles to exit for rivals these established
rivals are under significant competitive pressure. Furthermore, big merchants like Wal-Mart also pose a
serious threat to the business because they have significantly more assets, promotion clout, and recognition
among customers. They also engage in aggressive advertising campaigns, have a wide variety of high-quality
products, good in-store amenities, good store locations, competitive pricing, and flexible store hours.
Dollarama's profitability and revenue growth would suffer greatly if these well-established enterprises
entered the dollar store market more aggressively. Because of this, there is fierce competition among
established businesses, which poses a significant competitive danger to Dollarama. Because of this, there is
fierce competition among established businesses, which poses a significant competitive danger to Dollarama.
The possibility of new rivals entering the dollar store sector poses a second risk to Dollarama.
Notwithstanding the fact that the business is the leading retailer of dollar stores in Canada, there is a
considerable chance of new competitors from Canada, the United States, and other foreign nations entering
the market because there are neither significant economic obstacles nor onerous government restrictions for
setting up dollar stores. The potential danger of fresh players into the dollar store industry is also high due to
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low variations in goods and brand recognition, comparatively minimal investment in capital or startup
expenses, easy access to channels of distribution and manufacturers, and an industry size made up of small to
medium firms. These factors could negatively impact Dollarama's business and financial results.
The possibility of substitute items is the third factor affecting Dollarama's competitive environment.
Although Dollarama gives clients a wide selection of more than 3500 everyday items, its competitors may
provide customers with the same or a similar selection of products at comparable price points. Due to the
high likelihood that customers will transfer brands, the low cost of switching, and the moderate level of
customer loyalty to a given shop, alternative products pose a serious danger to this business.
The strong negotiating power of Dollarama's clients is the fourth element affecting its ability to compete. Due
to the little product distinction between the company's offerings and those of its rivals, this industry has a
high level of buyer power. In other words, customers have more negotiating power when choosing different
goods and stores because there are numerous retailers providing the same or similar things. High buyer
power for customers in this industry is also a result of low customer volume purchasing and low
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Political Factors
Change in policy with the coming in of a transition government - Trends indicate that Canada's there will
be a change in governance after the upcoming polls. Dollarama should be prepared for this eventuality as it
- Regulations and Procedures - Dollarama has a range of regulations that govern how it operates in the
different markets it works in. In recent times, in Canada and other developing nations, the regulations
regulating market access and how shops (Department & Discount) are permitted to operate in the local
marketplace have.
- Taxation policies
Over the course of the last two decades, The Dollarama company has profited from laxer tax legislation in
the western part of the world. The results are higher income and growing R&D expenditures. The rising
disparity in Canada may necessitate changes to the taxes rules. Municipal governments are also looking into
taxing strategies that are specialized to the retail (Department & Discount) industry to reduce greenhouse gas
The most recent Canadian government efforts may encourage greater capital to flow into the services sector.
Given that the public is more inclined to support the suggested policies, it is logical to assume that their
implementation are going to endure beyond than the present Canadian government's approved period.
Relevance of municipal governments in Canada; In contrast to most other nations, local governments in
Canada are essential to the creation of legislation and policy. Instead of creating national laws in Canada,
Dollarama must closely monitor the states and territories where it operates.
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System of governance;
Even if it may produce leadership who may lead legislation that deviates from the standard of the past, I don't
believe much is going to shift in Canada's current government system, which has long fulfilled its function.
In order to forecast trends, Dollarama must maintain a close eye on the government priorities for the entire
industry.
Labor regulations: Retail companies rely heavily on their workforce to operate efficiently. Any changes to
labor regulations, such as minimum wage, overtime, or worker protection laws, could increase labor costs for
the company (Gilbert & Huber, 2022). Changes in immigration policies limit the availability of a qualified
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Economic Factors
The effectiveness of the securities markets in Canada, has allows Dollarama to access strong financial
markets and simple liquidity in the Canadian share market in order to grow internationally.
Economic Performance of Canada - - It's anticipated that the country's economic growth will remain
constant over the next five to ten years due to increasing expenditure on emerging sectors, steady consumer
Economic cycles: The strength of the Canadian economy has a direct impact on The Dollarama company's
success there. The foundations of the past two decades of economic expansion have been laid by greater
internationalization and the exploitation of the local assets to supply foreign markets.
Vital infrastructure is present in Canada The Canadian government has gradually increased spending on
developing essential infrastructure with the goal of facilitating and improving the business environment.
Dollarama might make use of the present facilities to encourage expansion of the services sector in Canada.
Forex: Dollarama's long-term and immediate-term investment plans may be impacted by the fluctuating
Workforce expertise in the Canada market; Canada's workforce professionals possess intermediate to
high expertise in the services sector. The Dollarama company can employ it to further develop its offerings in
Canada and to open new opportunities internationally by utilizing the qualified staff.
The GDP for the retail trade sector was around 106.24 billion Canadian dollars in February 2022.
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The GDP for the retail trade sector was around $107.08 billion Canadian dollars in February 2023 (Statista,
2023).
Disposable Income:
The average disposable IncomeIncome per person in Canada was around 33,000 Canadian dollars in 2021.
Personal consumption:
Exchange rate:
The Canadian dollar trades at around 0.7216 US dollars (Bank of Canada, 2023).
Inflation rate:
The inflation rate in Canada was around 8.1% in June 2022 (Bank of Canada, 2023).
Interest rate:
The Bank of Canada's benchmark interest rate is 4.5% (Bank of Canada, 2023).
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Social Factors
Accessibility to essential services: Over the past fifteen years, the average person in Canada has usually
enjoyed improved accessibility to these vital services. The cause of this has been the rise in public service
spending.
- Education - Canada as well, and the Dollarama sector in particular, has a high level of education.
Dollarama can use it to increase its share of the market in Canada. In Canada, media outlets are crucial for
influencing public opinion. Both traditional and digital networking sites are rapidly growing in Canada. This
tendency can be used by Dollarama to more effectively market and advertise its products.
Mentality toward health and safety - As liberalization advances, mentality about healthcare and security
deteriorates. In Canada, the cost of failure is too high, so Dollarama should refrain from embracing these
viewpoints.
- Structure of power - There is an income gap or disparity increase in Canada. The social order or hierarchy
which has been in place for the past 60 to 70 years has evolved
Canada's social structure and norms vary from those of Dollarama's home market. It ought to make a
concerted effort to put together indigenous personnel that is knowledgeable with the customs and values of
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Technological
Technology has shortened the time it takes for a raw material to be transformed to a finished product. This
has made it attainable for manufacturers to produce novel products faster. Due to this, Dollarama's
promotional division is under pressure to advertise a wide range of goods in order to please the suppliers. The
Thanks to state of the art technologies , the services sector is quickly reducing production and servicing costs.
To increase flexibility and be able to adapt to shifting cost structures and customer needs, Dollarama must
- Investment in research and development at the macro and local levels in Canada. If both the private and
public sectors are investing money in creating novel ideas, there is a disruptive creative ecosystem.
- The most recent technological advancements made by Dollarama's rivals; this might give you a decent
idea of what they're up to and where the next phase of the retail (department and discount) business model
lies.
- The chain of supply is being rapidly disrupted by advances in technology as it gives wider actors in the
- 5G technology and the possibilities - Dollarama needs to pay close attention to how user experience is
improving as speed and access increase. This has the potential to dramatically change how customers use
Automation and the rise of the Internet of Things (IoT) are becoming increasingly popular in many industries
and can reduce labor costs, increase efficiency, and improve safety. Robots are replacing manual labor and
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allowing for increased production. It will reduce labor costs and allow companies to respond more to
customer needs.
The emergence of artificial intelligence (A.I.) used to automate processes and make decisions are increasing
to maximize efficiency and safety, improve customer service, and streamline operations (Rathore, 2023).
Increasing the use of artificial intelligence (A.I.) would potentially revolutionize many industries by
automating mundane tasks and making decisions based on large datasets. Companies will become more
efficient and productive by reducing costs and offering new and innovative services.
Increasing augmented reality (A.R.) will allow users to interact with virtual objects in a real-world
environment. It has many potential applications, such as virtual tours, product demonstrations, and interactive
The emergence of blockchain technology: Blockchain is a distributed ledger system used to securely record
and store data. It is used to create new products and services, such as digital currencies and smart contracts. It
would allow companies to securely manage and transfer data and assets.
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Competitor Analysis
Dollarama is competing against local as well as international businesses in the retail trade, where rivals are
vigorously bidding for clients based on cost, shop location, merchandise quality, uniformity of in-stock
levels, and satisfaction with service. The business's rivals include nationwide, regional, and local owners of
dollar stores, discount shops, variety stores, convenience stores, and bulk retailers. To succeed in the market,
a company must differentiate its goods and services with a clear and unique value proposition. Some of the
company's primary competitors are Metro Inc., Loblaw Companies Limited, Hudson's Bay Company,
Canadian Tire Corp. Ltd., Empire Co. Ltd., Dollar Tree Inc., and Costco Wholesalers Canada, Ltd.
With 0.8% of the total market, Dollarama is ranked 15th in terms of retail sales distribution in
Canada, behind Loblaw with 16% of the market, Sobeys has 8.8%, and Walmart with 7.4%. However,
Dollarama dominates the dollar and variety store market in Canada, with 68.8% of the market to Dollar tree's
8.7%. Canada's expanding market for household goods presents Dollarama with prospects. According to
research data, Canadian home goods retail will be worth US$40,602.4 million by the end of 2025. The home
renovation sector dominates the Canadian market for home products, accounting for 56.1% of the total
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market value. The second-largest category, which accounts for 28.4% of sales, is home goods, followed by
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Market Analysis Template
1. Market analyzed
The market being analyzed is the discount retail market in Canada, specifically the segment in that discount
Discount retail industries needs to meet affordable and accessible products for consumers looking for
everyday essentials, household items, and low-priced novelty items. The companies specifically caters to
consumers who want to save money on their purchases without sacrificing quality.
According to Statista, the discount retail market in Canada had a total revenue of approximately $674 billion
4. Total customers
The total number of customers is all the population in Canada which is estimated to be 39,292,355 people
5. Potential growth
The market has been experiencing steady growth over the past decade, with total retail sales increasing from
CAD 482 billion in 2011 to CAD 634 billion in 2020, a CAGR of 3.4% (Statista, 2023). The future growth of
the retail sector is anticipated to be fueled by rising disposable income, changing consumer preferences, and
population growth.
The COVID-19 epidemic has hastened the transition to e-commerce and omnichannel retailing, which is
anticipated to fuel online sales and the expansion of digitalization in the retail industry.
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The company should consider market segmentation, consumer demographics, and industry trends to fully
understand the retail market. The retail industry is divided into several segments, including grocery,
fashion, electronics, and home goods. Each segment has its unique customer base and demand drivers,
making it essential to understand the specific dynamics of each industry segment. Consumer
demographics, such as age, gender, and income, can significantly impact the demand for retail products
and services. Keeping up with the latest industry trends, such as digitalization, sustainability, and
personalization, provides valuable insights into the future of the Canadian retail market. The trend
includes changes in consumer spending patterns, competitive landscape, technological developments, and
macroeconomic trends. The company should also analyze the regional differences in the Canadian retail
market to better understand the opportunities and challenges of operating in different provinces.
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Internal Analysis Template
Tangible Resources: Physical retail stores, inventory such as food, clothing, toys, and household items, and
internal technology infrastructure. Dollarama is a leading dollar store chain in Canada, with over 1,000
physical retail stores located across the country (Statista, 2022). The company's internal technology
infrastructure includes the company's point-of-sale systems, warehouse management systems, and customer
relationship management systems. Dollarama has invested heavily in the last few years to expand its physical
store footprint and its e-commerce capabilities. The expansion has allowed the company to offer its products
Intangible Resources: Brand recognition is associated with quality and value, reputation, intellectual
property, and customer loyalty due to honesty and integrity. Dollarama has established a reputation for
providing excellent customer service and for being an honest and reliable business partner. Statista 2022
reports that it is the far biggest and most frequently visited store in Canada. Dollarama has a portfolio of
Strategic Resources/Competencies
Dollarama's strategic resources/competencies include its operational capabilities, financial resources, and
organizational structure. Dollarama has a valuable extensive distribution network which has allowed them to
capture a significant portion of the Canadian discount retail market. They have also invested heavily in their
supply chain and logistics capabilities, allowing them to offer competitive prices and a wide selection of
products (Statista, 2022). The financial resources are rare in the discount retail market as the have been able
to generate strong cash flow and maintain a high level of profitability despite the competitive nature of the
industry. The company has developed an inimitable unique corporate culture of “value-driven” decision-
making that is focused on customer service and operational efficiency. It's operational capabilities are non-
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substitutable as they have invested heavily in the development of its supply chain and logistics capabilities,
which have allowed them to provide customers with a wide selection of products at competitive prices.
Dollarama has developed an efficient supply chain management system and point sale system, enabling it to
Dollarama currently uses a cost leadership strategy to minimize operations costs and pass on the savings to
the customers through lower prices. It has adopted a no-frills approach, providing basic products without
The main activities of Dollarama are operations, financial and accounting, research and development, human
resources, marketing, sales, and service. Operations involve the day-to-day running of the stores, such as
stocking shelves and processing payments. Dollarama operates a network of more than 1,000 stores
throughout Canada. It provides a variety of products and services, including everyday household items, party
Financial and accounting activities include managing the company's finances, preparing financial reports, and
keeping track of income and expenses. Dollarama has established strong internal controls and processes to
ensure that its financial reporting is accurate and reliable. The company also follows Generally Accepted
Accounting Principles (GAAP) and ensures compliance with all applicable laws and regulations (Dollarama,
2019). The company publishes an annual financial report to provide stakeholders with an overview of its
financial performance.
Research and development are used to identify new products and services that can be offered to meet
customers changing preferences. Dollarama is committed to providing customers with innovative products
and services that meet their needs. The company has dedicated teams of professionals who are responsible
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for researching and developing new products and services. The teams utilize a variety of techniques,
including market research, customer feedback, and trend analysis, to identify opportunities for improvement
and growth.
Human resources involve recruiting, training staff, and managing employee relations. Dolarama is committed
to providing a safe and supportive working environment for its employees. The have established policies and
procedures to promote a diverse and inclusive culture, and to ensure that employees are treated with respect
and fairness. Marketing, sales, and service activities involve promoting the company's products and services
and providing customers with support. The company use digital marketing, social media campaigns, and
promotional events (Dollarama, 2019). The company also provides customers with helpful customer service,
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Internal Analysis
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KPI INTERNAL ANALYSIS
With a solid team of well-trained customer service representatives, Dollarama is able to provide the highest
levels of client satisfaction. Clients find it easy to shop at Dollarama due in part to the wide variety of items
and the friendly atmosphere. The company runs a tight ship and maintains strict accounting practices such as
inventory management, internal and external communications, order processing, and assembly time. These
methods allow Dollarama to successfully track sales volumes. Management will continue to adjust prices
based on market variables to ensure that margins remain strong and profitable.
The analysis of the KPI Internal is critical to Dollarama's success. It is important to understand how they are
doing, and how they plan on improving in the future.
Competitors Analysis - How do other retailers compare? For example, how many people visit a competitor's
store during the same time period?
Customer Satisfaction - Are customers happy with their Dollarama experience? Are there issues that need to
be addressed? What types of services do customers value most?
Sales Volumes - How many items did shoppers purchase at Dollarama last month? Was there a change in
product sales or customer service?
Profitability - How much money did Dollarama make last year? What is its projected profit margin this year
and next year? Are there any opportunities to grow revenue or improve profitability while maintaining
margins?
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2023 Q3 versus 2022 Q3 Results
Compared to the previous year, 2022, EBITDA climbed by 11.3% to $386.2 million, or 29.9% of sales.
Compared to 2022, operating earnings climbed by 11.5% to $302.7 million, or 23.5% of sales.
In contrast to 16 net new stores, 18 net new stores opened.In Q3 2023, the company opened 18 new
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