A Dollarama store is seen in Montreal, Wednesday, June 7, 2023. THE CANADIAN PRESS/Christinne Muschi
MONTREAL – Dollarama Inc.’s new chief financial officer says shrinkage – a metric the company uses to track inventory lost through theft, damage and fraud – has increased but is showing signs of plateauing.
Patrick Bui would not provide numbers to analysts on a Thursday conference call asking how prevalent shrinkage was in comparison to prior years or what the company was doing to tackle, it though he said the company had introduced changes meant to address the issue and is open to options including a review of self-checkout kiosks. He painted the increase in lost inventory at the dollar-store chain as part of a “retail industry phenomenon.”
“(It’s) not uncommon in the industry,” he said. “Managing ‘shrink’ is a high priority at Dollarama, and we’ve put in place a host of initiatives to combat shrink.”
The increase in shrinkage comes as inflation remains above the Bank of Canada’s two per cent target and customers are grappling with high prices of goods.
Meanwhile, there have also been reports of a rise in shoplifting that has pushed some retailers to remove self-checkout technology and others to boost staffing, cameras and sensors at the kiosks.
Some in the retail industry feel self checkout contributes to shoplifting because it provides more opportunities for customers to steal by scanning only some of their merchandise at the time of purchase.
In October, on the heels of Vancouver police reporting they’d made 258 arrests and recovered $57,000 in stolen merchandise form shoplifting, the general manager for loss prevention at London Drugs said most retailers have seen at least a 20 per cent increase in retail theft in recent years.
Dollarama’s uptick in shrinkage didn’t weigh heavily on its most recent quarter, which it reported Thursday.
The retailer said it earned $323.8 million or $1.15 per diluted share in its fourth quarter. The result for the period ended Jan. 28. was up from a profit of $261.3 million or 91 cents per diluted share a year earlier.
Sales for the 13-week period totalled $1.64 billion, up from $1.47 billion a year earlier. Comparable store sales rose 8.7 per cent as the number of transactions rose 11.2 per cent, but the average transaction size fell 2.2 per cent.
As it released such figures it also announced it raised its quarterly dividend by nearly 30 per cent to 9.2 cents per share, up from 7.08 cents per share.
This report by The Canadian Press was first published April 4, 2024.
Companies in this story: (TSX:DOL)
