Whether the stock market is surging or swinging sideways, I like to anchor part of my portfolio in some fundamentally strong stocks that deliver the essentials. For example, businesses that keep people coming back, not because they want to, but because they need to. And it’s even better when such companies manage to keep growing, expanding, and improving margins while doing it.
One discount retailer, Dollarama (TSX:DOL), is an expert in doing just that — and it’s not slowing down. Strong demand, smart store growth, and a sharp eye on costs have helped it rise above the noise. In this article, I’ll show you why Dollarama earns its place on my list as a top consumer stock to buy, even when the economy starts to feel a little shaky.
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Why Dollarama could be the best consumer stock to buy
You’ve probably heard that Dollarama is among the most trusted brands in Canadian discount retail. Known for its fixed-price model, the company runs over 1,600 stores across Canada, offering a wide range of consumables, seasonal items, and general merchandise at price points up to $5.
Over the last year, DOL stock has jumped 43% to currently trade at $187.34 per share with a market cap of $52.2 billion. But what’s more impressive is its longer-term run. The stock has gained over 141% in three years and over 286% in the past five.
Expanding footprint at home and abroad
Interestingly, Dollarama’s growth strategy has two main engines. The first is in Canada, where it opened 22 net new stores in the latest quarter — expanding its store count to 1,638 locations. More importantly, the company plans to reach 2,200 stores by 2034 and has already built the systems and infrastructure to support that kind of growth. In fact, it’s planning a new logistics hub in Western Canada to support its expanding network.
The second growth engine is Dollarcity, its Latin American investment. Dollarama owns slightly more than a 60% stake in this fast-growing retailer, which operates 644 stores across Colombia, Guatemala, El Salvador, and Peru. Dollarcity posted a 12.6% year-over-year sales jump in its latest quarter with the help of network expansion and higher margins from improved logistics.
Dollarama recently added a third pillar to its growth story with the completed acquisition of Australia’s largest discount retailer, The Reject Shop. This move gives it a foothold in yet another growing market, opening the door for international expansion well beyond Latin America.
A resilient pick with room to grow
Over the last two years, some retailers have struggled with tight consumer spending and rising costs. Nevertheless, Dollarama is showing how to adapt and thrive even amid a difficult economic environment. Its efficient cost structure, flexible pricing model, and smart sourcing strategies have helped it maintain strong profitability even when the economy feels unpredictable.
Whether it’s from Canadian shoppers hunting for deals, new customers in Mexico, or fresh opportunities in Australia, Dollarama is building a business that has the potential to keep growing for decades. Given these solid fundamentals, its stock has the potential to deliver outstanding returns in the long term.
