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Experts say counterfeit hand sanitizer recall is a lesson for retailers

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Dollarama Inc. is removing a counterfeit and recalled hand sanitizer from its shelves, which experts say should serve as a reminder of how important it is for retailers and consumers to do their due diligence when shopping.

“Since coronavirus started, it’s just been a huge Wild West of personal protective equipment (PPE),” said Yue Gao, a pharmacist and the quality assurance lead at Ontario-based PPE supplier MedyKits.

“Some people don’t realize that this is happening.”

Gao’s remarks came after Health Canada revealed that it had uncovered a counterfeit Daily Shield hand sanitizer for sale at one of Dollarama’s Thunder Bay, Ont. with the same lot number as a legitimate Bio Life Sciences Corp. product.

Montreal-based Dollarama said the 250 mL product labelled NPN 80098979, Lot 6942 Expiry May 2023 was available in roughly half the chain’s stores and each location sold about 17 bottles, which were removed as soon as Health Canada began investigating.

Health Canada believes the fraudulent version of the product may not be effective at killing bacteria and viruses, and poses serious health risks because it contains methanol. The ingredient is not authorized for use in hand sanitizers and can cause severe adverse reactions or death when ingested.

It’s far from the only recall the country has faced in recent months as COVID-19 has made hand sanitizers a hot commodity and spurred dozens of distillers and now companies to start pumping out the product.

Health Canada said it has recalled more than 100 hand sanitizers recently and Gao has heard her fair share of complaints about concerning products.

“Working in the pharmacy, I actually had a customer come up to me and show me pictures of her son’s hands because he developed a rash and very very dry skin that was red from hand sanitizer he was using in school,” Gao said. “It didn’t look good right so I had to tell her ? to make sure that you’re protecting yourself with your purchases.”

Fraser Johnson, the Leenders Supply Chain Management Association chair at Western University in Ontario, said recalls highlight that retailers should be focused on two things: suppliers and quality.

“You get non-reputable suppliers that want to cheat and they can go through a review process with (a retailer) and be supplying them for a number of years and then decide that they want to substitute the hand sanitizer that they’ve been shipping with them and not disclose that,” said Johnson.

“That’s a very difficult thing for a company to check.”

Retailers, he said, can ask hand sanitizer makers for references or search for websites and proof of what other companies have trusted the brand.

Health Canada said in an email to The Canadian Press that it recommends companies refer to a list of authorized hand sanitizers, complete with natural product and drug identification labels, it has posted on its website

The organization has also released a second list of disinfectants and hand sanitizers accepted under interim measure the government put in place allowing for certain products to be sold in Canada if they were approved in other jurisdictions (and were determined not to compromise safety.

Health Canada said it is continuing to investigate the Daily Shield counterfeits with the co-operation of Dollarama, which told The Canadian Press in an email that all of its hand sanitizer purchases go through a full compliance review before being sold to ensure the quality and safety of the product.

“The product in question was purchased through a long-standing Canadian vendor. Dollarama was not the importer or license holder of this product,” said spokesperson Lyla Radmanovich.

“Customers are invited to discard the product or return it to any store for a full refund.”

Customers who don’t want to be duped should only buy from trusted retailers with brands they associate with quality, said Johnson.

If it looks like it’s cheap, think he carefully, he said.

When Gao is purchasing hand sanitizer, she makes sure it doesn’t have methanol in it and pays close attention to the label.

“Some of these counterfeit sanitizer companies have a fake label on top of the bottle, and the only time you can really tell that those ones are fake is to just keep an eye on recalls that Health Canada website puts up, so be vigilant and tracking that as well.”


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Dollarama workers call for resumption of pay raise amid the pandemic

Dollarama workers in Montreal are demanding higher wages and better working conditions after the retailer ended its temporary coronavirus pay boost earlier this month.

Employees at Dollarama stores received a 10 per cent wage increase at the end of March while warehouse workers saw a $3 raise for employees who typically start near minimum wage, which in Quebec is $13.10.

Dollarama and several other retailers launched their so-called pandemic pay programs as COVID-19 began to spread throughout Canada, triggering unprecedented working conditions amid a shopping frenzy that left some store shelves bare as companies scrambled to restock products ranging from flour to paper towels.

The Montreal-based retailer stopped the pay premiums on Aug. 2 after extending them for a month and a half beyond the expected end date.

Despite Dollarama’s efforts to ramp up health measures amid the pandemic, it is not possible to maintain physical distancing inside its Montreal warehouse, said organizers at a demonstration near the facility in Montreal on Thursday afternoon. Hundreds of employees clock in and out at the same time and work on the same floor, they said.

Gaurav Sharma, who works as a pallet builder in the warehouse, described conditions as “the very worst” due to a lack of onsite medical resources and inconsistent adherence to health measures such as masks and distancing.

“Some people are putting on masks, some people are not putting on masks,” said Sharma, 40.

“It’s very hard work, and the salary is very low,” he said of his job, which involves lifting and stacking boxes.

Sharma, who lives with his wife, sister and father, said he is concerned about the precariousness of both his health and income, particularly for his family.

“He has a lot of medical problems,” Sharma said of his 72-year-old dad. “My father and my sister are dependent on me.”

The distribution centre is staffed primarily by immigrants and asylum seekers employed through temporary placement agencies, leaving already vulnerable workers in a less secure position, said organizers with the Immigrant Workers Centre in Montreal.

Dollarama said it continues to adhere to strict COVID-19 health and safety protocols across its operations, having developed them in collaboration with government agencies at the outset of the pandemic.

“The repeatedly recycled claims being made by these third parties regarding Dollarama’s working conditions and response to the pandemic are 100 per cent false and unfounded,” spokeswoman Lyla Radmanovich wrote in an email.

“Pay scales for our workforce continue to be competitive _ both in stores and in our logistics chain _ and have evolved throughout the course of the pandemic, dictated by market conditions.”

Canada’s three major grocers _ Loblaw Companies Ltd., Metro Inc, and Empire Co. Ltd. _ also halted their temporary pandemic pay bonuses simultaneously in mid-June.

The news sparked a backlash, with unions representing some of the workers pushing back against the decision saying the pandemic was not over. Unifor National called for the increased pay to be made permanent.

A parliamentary committee hearing last month saw executives from the three grocery chains face questions over their cancellation of the $2-per-hour wage increase, which was implemented in March.

The grocers have said they stopped the programs as the COVID-19 situation stabilized at their stores and distribution centres. Loblaw also indicated it was no longer benefiting financially from the pandemic despite increased sales as it invested hundreds of millions of dollars into safety measures.

Dollarama reported a year-over-year sales boost of two per cent to $844.8 million and a nearly 17 per cent drop in net earnings to $86.1 million in the quarter ended June 30.

“$86.1 million in profit,” read one attendee’s sign at the demonstration Thursday afternoon, “but nothing for workers.”

About 50 protestors attended the event, calling for permanent restoration of the pandemic pay and safer working conditions between chants of “solidarity.”


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Dollarama says protracted trade war will hamper ability to find new products

UnknownA protracted trade war between the United States and China could make it more challenging for Dollarama Inc. to find new products that appeal to its customers’ desire to hunt for “treasures,” the discount retailer’s CEO said Sept. 12.

Chinese factories are on standby and not creating new moulds or putting money into research and development on products destined for the U.S. market because of the trade instability, Neil Rossy said during a conference call about it’s second-quarter results.

“And that has an impact on the retailers of the balance of the world, whether its Europe or Canada or everywhere else, because we all benefit from each other’s creativity and productivity,” he said.

“When world markets are having a harder time, there’s less creativity and so that makes the buyers’ jobs on a sourcing front, whether domestic or abroad, more challenging.”

Rossy said retailers prefer a stable environment, but can manage if the impasse lasts only a short while.

“It’s still very stable and I don’t foresee there being any really big challenges unless it goes on for a year plus.”

The comments came as the Montreal-based retailer reported a profit of $143.2 million in its latest quarter as its sales grew nine per cent compared with a year ago.

Its profit amounted to 45 cents per diluted share for the quarter ended Aug. 4, compared with a profit of $140.4 million or 42 cents per diluted share a year ago.

Sales totalled $946.4 million, up from $868.5 million.

Comparable store sales grew 4.7%. That outpaced last year’s sales growth of 2.6% for existing stores as the company focused its merchandise strategies on enhancing revenues, Rossy told analysts.

“We are very focused on stimulating traffic and increasing basket size and are pleased with consumer response to date,” he said, adding that consumer surveys support that its offering and concept resonates.

Rossy said Dollarama has been expanding its product offering where possible and updating selection all the time. It offers more than 4,000 year-round products and more than 700 seasonal ones.

Analysts, on average, had expected a profit of 46 cents per share and revenue of $939.2 million, according to financial markets data firm Refinitiv.

In its outlook, Dollarama raised its guidance for comparable store sales growth for the full year to a range of 3.5% to 4.5% compared with earlier expectations for between 3.0 and 4.0%.

However, the retailer said its gross margins are expected to come in at the low end of its earlier guidance at 43.25 to 43.75%, compared with earlier expectations for between 43.25 and 44.25%.

Dollarama operates 1,250 stores across Canada and expects to grow its network to 1,700 locations by 2027.

It recently exercised its option to purchase a majority stake in Dollarcity for an estimated US$85 million to US$95 million. A total of US$40 million was paid last month with the rest to be handed over next year, subject to final adjustments.

“This truly marks the beginning of a new phase in Dollarama’s growth trajectory by establishing a second growth platform in Latin America in complement to our existing Canadian growth strategy,” Rossy said.

Dollarcity has 192 stores in Colombia, El Salvador and Guatemala. It expects to add up to 50 this year and expand its network to 600 locations by 2029.


Dollarama watching prices as it looks to grow foot traffic

UnknownDollarama Inc. is closely monitoring prices in its stores as it looks to boost foot traffic and generate growth in an increasingly competitive retail environment.

The company is focusing its lower-priced items to generate that traffic after putting too much emphasis on higher priced items up to $4, said CEO Neil Rossy on a conference call Thursday.

“I think you know quite honestly, that we did lose sight of it, on making sure we had all the traffic drivers needed to balance our higher price points.”

“When you take a business from a pure $1 store, and you evolve over the years to multi-price points, while being very successful in doing so, you’ll learn things,” he said.

The company is also constantly assessing prices on merchandise, with item prices assessed at least every three weeks during restocking, said Rossy.

He said the rebalance of price levels and items would help drive sales going forward.

“We have to refocus on traffic generating and unit sales, because at the end of the day, in bricks and mortar, that’s the bread and butter.”

The attention on prices come as the retail sector is in a very competitive retail environment with rising operating costs, noted RBC Dominion Securities analyst Irene Nattel.

She said the company delivered “solid” results despite the challenges.

Canaccord Genuity analyst Derek Dley, however, downgraded his rating on the company from buy to hold and lowered his price target after the company released lower than expected growth expectations for fiscal 2020.

The company said it expected same-store sales growth of 2.5% to 3.5% for the year, which is below its historical average same-stores sales growth target of 4% to 5%.

“In our view, the next few quarters are likely to represent a ‘show-me-story’ to many investors and as a result we are comfortable moving to the sidelines for the time being, as we await a more positive pricing environment and same-store sales acceleration.”

Sales for the fourth quarter totalled $1.06 billion, up from $938.1 million, while comparable store sales grew 2.6%.

Analysts on average had expected a profit of 55 cents per share and revenue of $1.07 billion, according to Thomson Reuters Eikon.

In its outlook for the coming year, Dollarama said it expected to add 60 to 70 new stores as part of its goal of having 1,700 stores by 2027.

The company also launched its online store in January, where it has about a thousand items for sale in bulk only.

Rossy said it would take some time for the online sales to have an overall impact, but that it would fill a customer need.

“Small businesses will find it more interesting to buy their stationary there, or what have you, and people having parties or conferences or whatever it is, will use it because it’s a practical way to get the best price.”