Dollarama Inc

TSX:DOL

Dollarama’s aggressive store expansion strategy within Canada risks saturating key markets. If new locations begin cannibalizing sales from existing stores, same-store sales could stagnate and impair overall profitability.

Heavy reliance on international suppliers leaves Dollarama vulnerable to adverse currency movements. Should the Canadian dollar weaken meaningfully against the U.S. dollar, the cost of imported goods would rise and margins could be squeezed.

Inflationary pressures could drive more Canadians to seek discount options, and Dollarama’s low-price model may become increasingly attractive. This would provide a near-term tailwind to sales and potentially expand the customer base.

By leveraging vast economies of scale with overseas suppliers, Dollarama can maintain cost advantages over smaller discount retailers. This purchasing power helps the company keep product prices low while preserving healthy margins.