Variety stores, especially dollar stores, were more resilient than other mixed retailers during the Coronavirus COVID-19) pandemic as more consumers tightened their budgets. Indeed, dollar store players Dollar Tree and the Great Canadian Dollar Store saw higher retail current value growth in 2020, compared to the previous year, and further healthy growth over 2021.
Variety stores continued to expand their product assortments in terms of groceries and home and garden products, in response to rising consumer demand in 2020 and 2021. Dollar stores, which number more than 1,700 stores in Canada, with more to come, exerted strong pressure on traditional grocery retailers.
Variety stores in Canada remained immature in terms of store numbers and penetration, compared with the channel in the US. According to Dollarama’s management, based on the number of stores operated by the top five US dollar store chains, there were approximately 10,000 people per store in the US as of 31 January 2021.
The uncertain economic environment is expected to benefit variety stores in Canada, because consumers tend to trade down during times of economic crisis. The appeal of the channel is set to grow, especially as dollar stores continue to expand their product offer and their physical outlets become ubiquitous in the country.
Despite experiencing a slump in foot traffic during the COVID-19 pandemic, Dollarama expects to retain its focus on brick-and-mortar stores. Indeed, the leading company in variety stores plans to open more outlets in the short to medium term.
Although the main focus of Dollarama as the leading player is on store expansion, at the same time, it plans to invest more in its digital platforms to remain competitive. Such investment is expected to respond to the growing demand for delivery and pick-up services.
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Variety stores are chained or independent retail outlets with a primary focus on selling a range of merchandise across several categories. Variety stores are chained or independent retail outlets with a primary focus on selling a range of merchandise across several categories, although they may also sell grocery items. Includes fixed-price stores (e.g. dollar stores) and catalogue showrooms. Example brands include Dollar General, Woolworth (Germany), and Miniso.See All of Our Definitions
This report originates from Passport, our Variety Stores research and analysis database.
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