The Survival Strategies of Dollarama in the Era of Online Retailing

Authors: Shuguang Wang*, Ryerson University
Topics: Business Geography, Canada, Economic Geography
Keywords: retail geography, business geography, Canada, Dollarama
Session Type: Paper
Day: 4/13/2018
Start / End Time: 10:00 AM / 11:40 AM
Room: Bacchus, Marriott, River Tower Elevators, 4th Floor
Presentation File: No File Uploaded

Record number of retail companies have filed for bankruptcy or reduced store locations in the past decade, attributing their doom to the increasing popularity of online shopping and to their web rivals. One exception is the Canadian dollar store chain Dollarama. Already having 1,095 stores in operation and outperforming its U.S. counterparts, Dollarama announced plans in March 2017 to expand further by adding another 1,700 store locations in the country in the next eight to ten years. This paper investigates how Dollarama is able to buck the trend and what strategies it has implemented to maintain profitability. Our study reveals that the strategies that contributed to Dollarama’s success include (1) deliberate expansion of merchandise offerings to widen its consumer base, while avoiding competition with other retailers, (2) careful selection of real estate to reduce leasing costs, (3) accepting credit cards as a method of payment to induce customer spending, and (4) diversification in procurement of merchandise to minimize risks associated with overreliance on a small number of suppliers

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