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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.”


Amazon opens small concept Whole Foods store in NYC

Screen Shot 2019-04-01 at 3.28.55 PMAmazon-owned Whole Foods, which revealed it was abandoning its 365 concept and looking to other formats to expand its footprint, recently opened a Whole Foods Market Daily Shop in New York’s Chelsea neighborhood. The new concept is located next door to a full-size Whole Foods Market.

The 2,500-square-foot store, which is open seven days a week from 6 a.m.-11 p.m., focuses on grab-and-go items and a self-checkout kiosk (staffed checkouts are also available), making it easy for the on-the-go consumer to grab coffee or tea, fresh juices, a selection of prepared foods including breakfast bowls and oatmeal, and lunch and dinner options such as paninis, half chickens, salmon and sides. The store also features a build-your-own-acai-bowl bar.

Daily Shop also highlights local products such as Gotham Greens pesto and salad dressings, Balthazar breads and New Yorker Bagels. Other highlights include:

  • A produce section featuring seasonal citrus, mangoes, avocados and, bananas, along with cut fruit and luau bowls in the coolers
  • A selection of flowers including potted orchids and plants
  • A mochi freezer with popular flavours such as vanilla, mango, strawberry and chocolate
  • Two-dedicated grocery aisles highlighting single-serve convenience-based and everyday essentials – and even a tins of pet food for shoppers’ furry friends
  • A small Whole Body section featuring toothbrushes, shampoos, deodorant, cough drops, candles and travel-sized products
  • Prime Member Deals highlighted throughout the store with blue weekly deal and yellow sale signage

This story appeared at ProgressiveGrocer.com.


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