Grocery prices are getting expensive, ridiculously expensive in some areas, and while the non-stop chatter about easing inflation is rather confusing to some, especially given food inflation is still too high, I do think that 2026 could continue to be the year where Canadians look to tighten their belts.
Whether that’s trading down to discount grocers, opting for generic private labels, or travelling a bit further for better deals, it’s clear that value in retail looks set for another win, at least in my view. Indeed, not much has changed just because the new year has arrived.
Arguably, the move to value could intensify if food inflation stays a bit higher for longer, and consumers might start cutting back in other areas. Either way, I think the following three stocks could rise as winners as demand for better deals looks to rise off the charts.
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Dollarama
If higher food inflation weighs on budgets, consumers might start looking for savings across a broader range of goods. Dollarama (TSX:DOL), the undisputed king of Canadian value retail, had a fantastic 2025, but there might be more good times coming, as the firm looks to pass on more value (as well as selection) to the customer. Of course, shares have become quite expensive, with DOL now trading at just shy of 42 times trailing price-to-earnings (P/E).
With immense recent quarterly strength, not just in Canada, but in Latin America, as well as its impressive earnings growth, I’m inclined to think the premium growth multiple is actually well-deserved. And given the potential for further inflation (especially in food and necessities), 2026 could be another big year of growth for Dollarama as it looks to take more share.
In 2025, Dollarama’s value proposition really shined through, and this year, I think we’ll see more of the same from the proven performer, which might be able to offer more in the way of deals, especially when it comes to lower-cost discretionary goods.
Apart from new store openings in Canada, I’d look for Dollarama to unlock significant supply chain efficiencies. More money saved behind the scenes means higher operating margins and even more savings for customers.
Loblaw
Loblaw (TSX:L) is betting big on value this year, with new No Frills and Maxi store openings through the year. It’s not just new locations, but also renovated ones that might keep Canadian consumers coming back. If you’ve shopped at a No Frills, you’ll know that they’ve got some tough-to-match offers, especially the flyer features. Though the selection is relatively limited compared to their larger supermarkets (most notably Superstore).
Either way, the company is investing $10 billion in Canada by 2030. And as inflation continues to weigh, my guess is that affordability will remain a driver for yet another year. Beyond the new store openings, I’d look for Loblaw to double down on its private labels, most notably No Name and President’s Choice. It’s not just the savings that could make such brands a hot seller, but perhaps the improved quality.
All considered, Loblaw still looks too cheap, given the value tailwind and its role in helping Canadians combat rising food prices.
