Dollarama bonanza as shoppers look for bargains in tough Alberta economy

The slower Alberta economy means people who usually shop at discount dollar stores like Dollarama for cheap batteries, glow sticks and helium balloons are now adding groceries and household goods to their carts. 

"When you lose your job and you are uncertain about the future, you make different types of decisions than when you are feeling very confident and you have a job," said Debi Andrus, assistant professor of marketing  at the University of Calgary's Haskayne School of Business.

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Dollarama posted a better-than-expected earnings report with increases in both sales and profits.

Its second-quarter results showed sales increased by nearly 15 per cent and 17 new stores were added.

"So for Dollarama, it's not surprising to see their earnings do well; we'll see Walmart do very well. Any store that focuses on lower prices will start to pick up what we call 'share of wallet' or market shares in terms of their earnings," Andrus said.

In tougher economic times, people on limited or shrinking incomes are looking for deals wherever they can find them.

"I use them a lot, the dollar stores," said Fred Mcaughey, at a Dollarama in Calgary.

"There's a lot of savings, especially for a student who can't afford a lot —  depends what's on sale, we follow the coupons," he said.

Andrus says the economy is cyclical and businesses build their plans around this ebb and flow; however, lower end retailers will be the big winners in lean times.

Along with its second-quarter earnings report, Dollarama approved a quarterly cash dividend for shareholders of nine cents.