Debit is fine at Dollarama stores but credit cards are a no-go despite some prices being raised beyond the discount chain’s usual “everything for a buck” level, says the Montreal-based retailer.
Dollarama Inc., which reported a $21-million profit Tuesday, said 39% of its sales now are paid for with debit cards, up from 29% a year ago, and customers who use them have an average transaction size 2.5 times larger than those paying with cash.
“From a credit-card standpoint we have concluded–following our 12-month test period–that we will not implement the credit card service as it has had no significant impact, negative or positive, on our sales,” chief operating officer Stephane Gonthier said during a conference call.
The company, which operates more than 600 dollar stores across the country, reported a second-quarter profit of $21 million for the period ended Aug. 1, down from $26.6 million. The year-earlier results included a $21.3-million gain on foreign exchange derivatives, compared with about $500,000 in the most recent quarter.
“We are pleased with this quarter’s results and we remain committed to deliver strong operating results,” CEO Larry Rossy told analysts.
“We continue to be excited about our future, (and) with strong brand recognition, industry-leading profitability, our team of dedicated people and a proven track record of organic growth we will be able to deliver increased value to our shareholders.”
Sales grew by 13.2% to $343.5 million in the second quarter, driven by the addition of 12 stores.
