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March 30, 2015
Canadian Dollar Store
Landscape & Shopper Survey
Field Agent Canada
Executive Summary - $1.00 Per Day!
There have been a lot of negative stories in Canadian retail lately but one bright spot continues to be dollar
stores which are outperforming other retail sectors.
To investigate this trend, Field Agent deployed a mobile survey to 250 Canadians on March 23, 2015 using the
Field Agent app (www.ca.fieldagent.net).
We asked respondents a series of questions concerning their shopping habits at Dollar Stores including the
frequency of visits, spending habits, distance travelled to shop at a dollar store.
Key Highlights:
• Dollarama has a huge lead on its competitors in the channel but there are still significant opportunities to
grow for Dollarama and its competitors.
• Canada is still far behind the United States in the number of dollar stores per capita, highlighting one retail
sector that likely has bright growth prospects.
• 53% of Canadians visit a dollar store at least once a week and spend an average of $13.54 per trip.
• That works out to spending $1.00 per day at dollar stores!
• On average, Canadians travel approximately 6.8km to reach their dollar store.
• Canadians buy a wide range of goods at dollar stores including “frames, balloons, wrap and chargers”.
• Canadians said that shopping at dollar stores is “fun, quick, inexpensive & convenient”.
“Dollar stores are a force to be reckoned with in Canadian retail and will continue to put pressure on traditional
retailers as they open new locations and increase their assortment into new categories.” stated Jeff Doucette,
General Manager of Field Agent Canada. “We would expect some of the smaller retail spaces left vacant by
retailers like Future Shop will be converted to dollar stores as competitors look to expand.”
For more detail contact Jeff Doucette at 403.966.7467 or [email protected]
Canadian Dollar Store Landscape & Shopper Survey
Canadian Dollar Store Landscape
Dollar Store Count - Major Chains
900
874
675
450
225
185
121
0
Dollarama
Dollar Tree Canada
Dollar Store With More
93
Great Canadian
48
Buck or Two Plus
Source: Dollarama Inc - Annual Information Form - Feb. 2, 2014
Key Insights:
Dollarama has a HUGE head start in the dollar store space in Canada, rapidly closing in on over 1000 stores across the country and lots of
space left to expand, especially in Western Canada.
Dollar Tree has added about 50% more stores since acquiring Dollar Giant and entering the Canadian market but has a lot of catching up to
do if it wants to seriously complete with Dollarama.
Canadian Dollar Store Landscape & Shopper Survey
Canadian Dollar Store Landscape
Key Figures Fiscal 2013
Key Figures Fiscal 2013
2013
% Change
Sales (Millions $CDN)
$2,065
+11.1%
Sales (Millions $USD)
Operating Income
$354.5
+12.2%
$3.48
Share Price ($CDN)
$84.00
# of Stores (Canada)
874
# of Stores
United States 4807
Canada - 185
17,400
Employees
N/A
Net Earnings Per Share
Employees
Source: Dollarama AIF - February 2, 2014
2013
% Change
$7,840
+6.0%
Operating Income
$970
+5.5%
+16.0%
Net Earnings Per Share
$2.74
+2.5%
+39.8%
Share Price ($USD)
$50.52
+25.9%
Dollar Tree 2013 10K - February 1, 2014
Key Insights:
Dollarama’s success and dominance in the Canadian landscape is impressive but it is important to remember that Dollar Tree has significant
clout given its operations in the United States where it generates nearly $8 billion USD in revenue through almost 5000 stores - affording it
significant purchasing power that can help boost margins in the Canadian operation.
Canadian Dollar Store Landscape & Shopper Survey
Lots of Room To Grow!
Population Per Dollar Store
40,000
30,000
27,000
20,000
10,000
13,000
0
USA
Canada
Source: Dollarama Inc - Annual Information Form - Feb. 2, 2014
Key Insights:
Comparatively, Canada has about half as many dollar stores per capita than the United States where Dollar Tree and other chains such as
Dollar General and Everything $0.99 are ubiquitous and well engrained in the shopping habits of consumers.
Canadian Dollar Store Landscape & Shopper Survey
Significant Regional Growth Opportunities
Dollarama - Population Per Store
80,000
74,698
60,000
58,881
51,155
40,000
40,664
36,869
49,307
48,767
33,668
32,728
27,922
20,000
0
National
ON
QC
37,643
BC
AB
SK
MB
NS
NB
PE
NL
Source: Statistics Canada, Dollarama Inc - Annual Information Form - February 2, 2014
Key Insights:
Looking at Dollarama, we see that the number of stores per capita is quite varied across the country. There is significant rom for Dollarama to
grow in Western Canada, especially in British Columbia.
It is important to note that even though ON & QC are relatively well developed markets for Dollarama; the population per store still pales in
comparison to the development of Dollar General in states like Texas (20,000 per store) or Louisiana (10,000 per store).
Canadian Dollar Store Landscape & Shopper Survey
Business Mix - Dollarama
Seasonal
12%
Consumables
38%
Key Insights:
Dollarama’s business mix has remained quite
stable over the past few years while they
have expanded store count and the price
range of the items carried in the store.
With $760 million in sales of Consumables,
Dollarama is a significant player in many
CPG categories.
General Merchandise
50%
Source: Dollarama Inc - Annual Information Form - February 2, 2014
Canadian Dollar Store Landscape & Shopper Survey
Dollar Store Shopper Study
Canadian Dollar Store Landscape & Shopper Survey
Dollar Store Shopper Study
Study Details
Field Agent deployed a mobile survey to 250
Canadians on March 23, 2015 using the
Field Agent app.
We asked respondents a series of questions
concerning their shopping habits at Dollar
Stores including the frequency of visits,
spending habits, distance travelled to shop
at a dollar store.
The information is summarized in the
following charts.
For more detail contact Jeff Doucette at
403.966.7467 or
[email protected]
Canadian Dollar Store Landscape & Shopper Survey
Trip Frequency
40%
35.4%
34.2%
30%
20%
18.6%
11.8%
10%
0%
> 1x per Week
1x Per Week
2-3x Per Month
1x Per Month
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Key Insights:
Trips to dollar stores are very frequent events for Canadian consumers with nearly 53% of
respondents saying that they make at least one trip per week to a dollar store.
On average, respondents indicated that they make 27 trips to a dollar store per year.
Canadian Dollar Store Landscape & Shopper Survey
Avg. $ Per Trip & Avg. $ Per Year
$20.00
$400.00
$365.25
$15.00
$300.00
$13.54
$10.00
$200.00
$5.00
$100.00
$0
$0
Avg $ Per Trip
Avg. $ Per Year
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Key Insights:
Canadians spend an average of $13.54 per trip to dollar stores which is a significant amount when
you think about the average cost per item in this channel.
The frequent trips add up to over $365 per year per shopper literally translated to $1.00 per day.
Canadian Dollar Store Landscape & Shopper Survey
Avg. Distance Traveled
10
8
6.8
5
3
0
Avg. Distance (km)
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Key Insights:
With respondents only traveling an average of 6.8 km to their nearest dollar store, proximity plays a
huge role in the number of trips Canadians make to these retailers. We expect this measure to
continue to fall as the number of stores continue to increase over the coming years.
Canadian Dollar Store Landscape & Shopper Survey
Number of Dollar Chains Shopped Regularly
3
2
1.8
1
0
Avg. # of Chains Shopped
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Key Insights:
Canadians cross-shop across dollar store chains, frequenting 1.8 chains on average. This is likely
limited by the low dollar stores per capita in Canada compared to the US and the effective “duopoly”
between Dollarama and Dollar Tree in many Canadian markets.
Canadian Dollar Store Landscape & Shopper Survey
Frequently Shopped Dollar Stores
100%
96.4%
75%
50%
37.2%
25%
14.8%
0%
8.0%
Dollarama
Dollar Tree
Buck or Two
5.6%
4.8%
Everything For A Dollar Great Canadian Dollar Store With More
8.0%
Other
Source: Field Agent Canada - Dollar Store Shopper Survey - March 23, 2015
Key Insights:
With its national reach and sheer number of stores, Dollarama is the most frequently shopped dollar
store in Canada and they reach an amazing 96.4% of respondents.
Dollar Tree is the second most visited chain however it is far behind Dollarama with just 37.2% of
Canadians shopping at the smaller chain.
Canadian Dollar Store Landscape & Shopper Survey
Most Frequently Shopped Retailers
Other Channels
100%
90.0%
75%
66.6%
55.2%
50%
50.8%
43.2%
33.6%
25%
0%
Walmart
SDM / Pharmaprix
Costco
Superstore
Canadian Tire
No Frills
Source: Field Agent Canada - Dollar Store Shopper Survey - March 23, 2015
Key Insights:
While it may not be surprising that 90.0% of dollar store shoppers frequented Walmart given the
“discount” focus of both retailers, it is interesting to note that Shoppers Drug Mart / Pharmaprix &
Costco are also highly frequented by dollar store shoppers despite their more up-market positioning
and focus on premium and higher value items.
Canadian Dollar Store Landscape & Shopper Survey
Products Most Frequently Bought
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Canadian Dollar Store Landscape & Shopper Survey
Impression of Dollar Store Shopping
Source: Field Agent Canada - Dollar Store Shopper Survey - Mar. 23, 2015
Canadian Dollar Store Landscape & Shopper Survey
© Field Agent, Inc. 2013