Discount giant’s big plans set in motion

Monday, June 15, 2026

Canada’s Dollarama is transforming The Reject Shop after acquiring it for $259 million, with plans to renovate about 100 stores annually and rebrand them under the Dollarama name within four years. This strategy aims to establish Dollarama as a leading discount retailer in Australia, intensifying competition for established chains like Kmart and Target despite initial operating losses.

Canada’s Dollarama is undertaking a significant transformation of The Reject Shop, the Australian discount retailer it acquired in mid-2025, with the goal of becoming a dominant force in Australia’s discount general merchandise market. Dollarama purchased The Reject Shop for $259 million and currently operates 410 stores across the country.

Dollarama CEO Neil Rossy outlined the company’s plans during the latest quarterly earnings call, describing a multi-year strategy to revamp The Reject Shop shops by gradually introducing imported Dollarama products, redesigning store layouts, and ultimately rebranding the stores under the Dollarama name. The goal is to renovate approximately 100 stores annually, completing the transformation within four years.

“We have now begun advancing our transformation road map in earnest,” Rossy said, noting that 13 stores were renovated and eight net new stores opened during the most recent quarter. By the quarter’s end, 28 locations had implemented new Dollarama-style layouts and fixtures, which include the introduction of Dollarama-sourced merchandise. Although early in the process, Dollarama has reported encouraging customer interest in the revised stores and the newly introduced product range.

Rossy emphasized that the rollout of Dollarama products will be gradual and carefully managed, with the company working through stock-keeping units (SKUs) to deliver competitive pricing and value tailored to Australian consumers. The CEO expressed confidence that after establishing a substantial retail footprint of between 500 and 600 stores, Dollarama will solidify its position as the market’s “800-pound gorilla.”

Despite Dollarama’s aggressive expansion and investment, the Australian business posted a net loss of CAD 1.4 million during the first quarter ended May 3, though sales reached CAD 192.8 million and earnings were CAD 14.8 million. Dollarama’s substantial market capitalization of over CAD 53 billion provides financial resilience to absorb these early losses as it commits to its long-term growth plans in Australia.

The company’s assertive strategy is seen as a clear challenge to existing Australian discount retailers including Kmart, Target, Big W, and Best & Less, all of which face increased competition as Dollarama seeks to reshape the sector with its low-cost, value-driven model.