By KHALID MAGRAM
Dollarama Inc.‘s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector. “It’s just one small part of our store,”Neil Rossy told analysts in September telephone call, where he was questioned about the company’s food merchandise and rivals playing in the same space. “We will keep an eye on all retailers—like all retailers keep an eye on us—to make sure that we’re competitive and we understand what’s out there.” Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets. However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store. The No Name stores being tested by Loblaw Cos.Ltd. in Windsor,St. Catharines and Brockville, Ont., are billed as 20 percent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise. Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar. “All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,”he said. To cope,many Canadians have spent more time seeking deals, trading down to more affordable brands and for going small luxuries they would treat themselves to in better economic times.
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