Forget Dollarama! 1 Cheaper Canadian Retail Stock With More Growth Potential

With Dollarama trading near its highs, this cheaper Canadian retail stock could be the smarter long-term buy right now.

Key Points
  • Dollarama (TSX:DOL) has executed well for years, but its stock price above $200 may leave less room for future upside.
  • George Weston (TSX:WN) trades at a much lower price and benefits directly from everyday grocery and essential spending.
  • Strong earnings growth, steady dividends, and ongoing expansion give George Weston more growth potential right now.

While Dollarama (TSX: DOL) remains one of the strongest retail operators in the country, buying its stock today may feel very different from how it did a few years ago. The company has executed well, expanded consistently, and rewarded shareholders along the way. But the problem now is valuation. With the stock trading above $200 per share and near its 52-week high, much of its long-term strength appears to be already priced in. That does not mean Dollarama will suddenly struggle, but it does mean its future returns may be more measured.

And for investors who want retail exposure with more upside potential, there is another Canadian retail stock worth considering right now. This alternative, George Weston (TSX: WN), is cheaper, pays higher dividends, and benefits directly from Canadians buying groceries and everyday essentials. In this article, I will explain why George Weston may be one of the best under-the-radar retail opportunities in Canada right now, especially for investors starting new positions today.

A retail business built around essentials

If you don’t know it already, George Weston operates through two core businesses that Canadians rely on every day. The first is Loblaw, which runs grocery stores, discount banners, pharmacies, and healthcare services across the country. The second is Choice Properties REIT, a real estate business focused largely on grocery-anchored retail and industrial properties.

After rallying by 28% so far in 2025, WN stock is currently trading around $95.58 per share, giving it a market cap of about $36.4 billion. That is far lower than Dollarama’s market value, even as George Weston has exposure to multiple essential retail categories. George Weston also pays a quarterly dividend with an annualized yield of about 1.3%. It may seem small, but it is still noticeably higher than Dollarama’s yield.

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Source: Getty Images

Strong recent performance backed by real demand

In the third quarter, George Weston’s total revenue rose nearly 5% YoY (year over year) to $19.5 billion. That strong growth came mainly from Loblaw, where the food retail business attracted more customers and larger shopping baskets. Similarly, its discount banners continued to outperform as shoppers leaned toward value and convenience.

On the profitability side, the company’s adjusted earnings before interest, taxes, depreciation, and amortization rose 8.4% YoY to $2.34 billion, showing that higher sales also translated into better operating efficiency. As a result, George Weston’s adjusted quarterly earnings climbed 15.1% YoY to $1.37 per share, backed by solid business performance and ongoing share repurchases.

Meanwhile, George’s other subsidiary, Choice Properties, also delivered stable financial results, with strong tenant demand across its necessity-based portfolio supporting cash flow stability.

Long-term growth prospects are firmly in place

Interestingly, Loblaw continues to expand its store network. It opened 19 discount stores in the latest quarter, remaining on track to open about 76 new stores and 100 pharmacy clinics in 2025. That expansion could help the company capture demand in underserved markets and support future earnings growth.

At the same time, Choice Properties continued to focus on disciplined development and capital management. Its portfolio remains heavily weighted toward grocery-anchored retail and logistics assets, which tend to perform well even amid softer economic conditions.

When these pieces come together, the parent company of Loblaw and Choice Properties, George Weston, offers something Dollarama may no longer offer at its current price. This includes a strong mix of essential retail exposure, stable earnings growth, dividend income, and a valuation that still leaves room for solid upside.

Fool contributor Jitendra Parashar has positions in Dollarama. The Motley Fool recommends Dollarama. The Motley Fool has a disclosure policy.

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