Are you really getting a deal at your favourite dollar store?
CBC’s Marketplace put items for sale at Dollarama and Dollar Tree to the test
In a comparison of 17 everyday items, a CBC Marketplace investigation has found prices at Dollar Tree were the same or higher in a price-per-unit analysis than at Dollarama or even Walmart, meaning Canadians may not always be getting the deal they think they are when shopping at popular dollar store chains.
"As the name says, everything here seems to be a dollar more or less. Right? Even though it's not," said Markus Giesler, a professor at the Schulich School of Business at York University.
WATCH: Marketplace's full investigation:
Marketing and store layout may contribute to the perception of the best deal, when it may not always be the case.
"The way the merchandise is presented to us is designed to make us buy more than we absolutely need," Giesler said. "That's also, quite honestly, the trap that many consumers fall into. Myself included."
Dollarama has more than 1,400 locations across Canada with products ranging from just under $1 to around $4. The company announced this week that it plans to start selling some items for as much as $5. Dollar Tree has about 230 locations selling goods for $1.25 or $1.50.
What they spent
The test aimed to compare identical items, but the stores often sold products in different sizes. In that case, the price was broken down per unit.
Froot Loops at Dollar Tree cost $1.25 versus $4 at Walmart and $2 at Dollarama. However, the package at Dollar Tree was only 87 grams compared to 345 grams at Walmart and 230 grams at Dollarama; converting to price per unit means the Dollar Tree product ends up costing more per 100 grams.
"There is a discrepancy between what these stores communicate, what they message and what they deliver, and that's something that's not always known to unassuming consumers," Giesler said.
Two test shoppers and the Marketplace team went to Dollarama, Dollar Tree and Walmart for a list of the same products in toiletries, snacks, food, cleaning supplies, toys and pet food — though they found sizes often varied.
Need to compare prices
Giesler said shoppers need to know their size comparisons.
A common tactic at dollar stores, he noted, is carrying just one type of product — one brand of toothpaste, for example — making in-store comparison shopping difficult.
Dollar stores don't typically sell anything for $1 anymore and many of those stores are based in lower-income neighbourhoods with more newcomers to Canada, he said.
"Often we're talking about vulnerable consumers, lower-income families and families who actually need every penny and need every dollar," he said.
"They signal, 'We make affordability and the Canadian dream happen.'"
Not all dollar stores are equal
In the end, Dollarama fared well in Marketplace's test, always edging out Dollar Tree on prices and within pennies of Walmart in that comparison of 17 items.
Dollarama sent Marketplace a statement that said it aims to provide competitively priced everyday products at low fixed price points year-round without sales or promotions.
Seven products that were more expensive in a price-per-unit comparison at Dollar Tree were: Froot Loops, Pringles, KitKat, Whiskas Perfect Portion cat food, Starburst candies, Colgate toothpaste and Crest 3D white toothpaste, which worked out to more than $6 per 100 millilitres.
Dollar Tree did have some wins in the Marketplace test: Smarties (at 75 grams as opposed to 45 grams) and Lever 2000 body wash had better prices than its competitors.
In a statement, the company wrote that the Crest 3D white toothpaste is considered a travel-sized item, and that consumers continue to shop at Dollar Tree for the extreme values they can find.
Two popular kids' items — Hot Wheels cars and Play-Doh containers — were both slightly more expensive at both dollar stores than at Walmart.
"When we walk into a dollar store, we're not really thinking of doing the value equation or the mathematics in our head," said Prof. Mark Lee of Ryerson University's Ted Rogers School of Management.
Instead, he said people are "thinking more about the dollar," which anchors buyers to a concept that that's not much to spend, but shoppers often spend more than intended and rarely leave a dollar store with only one item.
In a pricing win for dollar stores, both offered pregnancy tests for $1.25. Walmart had one for more than $8.
All three brands are in Health Canada's database of licensed products approved for efficacy and safety when used as directed.
Dr. Dara Maker, a family physician at Women's College Hospital, says she recommends dollar store pregnancy tests for her own patients who are trying to conceive.
"If you get a positive dollar store pregnancy test result, you are pregnant," Maker said. "It is very rare to get a false positive."
There were some products, like one-litre juice boxes for some brands like Minute Maid and Five Alive, that were just pennies apart at each store.
Experts said there are things consumers can do to ensure they get a good deal at the dollar store, like comparing prices and sizes.
"Do your research whenever you can. Compare and contrast even when the comparison cannot happen on the shelf itself within the aisle," Giesler said, suggesting that price comparison apps can be useful.
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