Dollarama Inc, the Montreal-based discount retailer worth almost as much as Woolworths and Coles combined, has taken The Reject Shop private in a $259m deal and is now reshaping all 401 Australian stores into a more tightly curated high-density value format. The Reject Shop, a 44-year-old brand known for budget household goods, has long operated in the shadow of chains like Kmart and Big W but shifting consumer demand for cheaper everyday essentials has set the stage for a radical reset under new ownership.
Behind the scenes, the Canadian group is rolling out a multi-year plan that starts with a complete inventory overhaul and ends with every store carrying the Dollarama name. Early numbers highlight how small the Australian operation is within the group. In the 13 weeks to November 2 The Reject Shop generated about C$186m in sales but still lost C$8.6m, while Dollarama’s North American and Latin American network delivered around C$1.72bn in sales and C$330m in profit over the same period. Management is signalling that Australia will keep dragging on earnings until at least after fiscal 2027, as it invests in new merchandising systems, logistics and compliance to get thousands of stock-keeping units aligned with its low-price model.
On the shop floor shoppers will gradually see more Dollarama-branded products from next year, with the range expected to build steadily through fiscal 2027 and 2028. A handful of stores have already been renovated with new layouts, fixtures, racking and lighting designed to pack more items into every aisle, and the plan is to roll this look across all existing locations over about four years, ramping up work from 2027 once processes are refined. The strategy is to take a deliberate and methodical approach, first reset the range, then scale up store refurbishments and only later flip the branding to Dollarama once the customer experience matches what the parent company is known for in Canada and Latin America.
If it works, the transformation seems likely to intensify competition at the budget end of Australian retail, putting fresh pressure on discount department stores and other value chains that target cost-conscious households. A fully converted Dollarama network could reshape expectations around price points and product variety in everyday categories, especially as more shoppers look for ways to stretch their budgets. But with profitability not expected before the end of the decade, the plan hinges on patient capital, smooth supply chain execution and an Australian customer base willing to embrace a foreign discount brand in place of a long-standing local name.
