Some Loblaws prices are double Dollarama's – here's why
A comparison of prices at Dollarama and Loblaws in Toronto recently went viral online, showing a handful of food items cost double – or more – at the big box grocer.
While Loblaws and Dollarama are not direct competitors – one being a discount store, the other a grocery chain – CTV News Toronto visited Dollarama and Loblaws locations in downtown Toronto to compare and contextualize prices at the two stores.
In some cases, Loblaws prices were more than double Dollarama’s, but as Mike von Massow, a food economist at the University of Guelph, explains, there is more than meets the eye.
The most staggering price difference between Dollarama and Loblaws was the cost of pasta.
At Dollarama, a bag (450g) of Italpasta spaghetti costs $1 while the identical product at Loblaws is priced at $4.49 – more than four times the cost. That being said, Loblaws also sells 2.27 kg of the same spaghetti for $7.99.
“You can look at that two ways. There’s an advantage for people who buy larger quantities or you can say there’s a disadvantage for people who can't afford to spend as much every time they go to the grocery store,” von Massow said.
Dollarama - $1
Loblaws - $4.49
Spaghetti sold at Dollarama in Toronto.
The same ethos applies to the difference in pricing for rice.
Ben’s Original rice at Dollarama costs $1.75, but only contains 132 g, slightly more than an average serving size.
The same product at Loblaws costs $4.49 for one bag, $9.99 for three bags or $10.49 for 2.2 kg.
“There are really good opportunities if you put more in your basket, but it can create a barrier for people who are living paycheque to paycheque,” von Massow said.
Dollarama - $1.75
Loblaws - $4.49
Ben's Original rice sold at Loblaws.
A loaf of Wonder Bread (675 g) – white and whole wheat – costs $2.50 at Dollarama.
The identical product at Loblaws costs $3.99 for a loaf or $7 for two loaves.
Evidently, Wonder Bread at Dollarama is cheaper, but Loblaws competes with their in-store brands. For example, original No Name bread costs $2.79 for a loaf (675g), just a few cents more than the Wonder Bread at Dollarama.
“Dollarama does not have a store brand, whereas Loblaws has President’s Choice and those are often the brands that people use to compete on prices,” von Massow explained.
Dollarama - $2.50
Loblaws - $3.99
Wonder Bread sold at Dollerama in Toronto.
A box of Quaker Life cereal at Dollarama costs $3.50, while the same-size (450g) box at Loblaws is priced at $5.49.
However, breakfast buyers looking to grab a carton of milk with their cereal will only have luck at Loblaws. In other words, it’s a one-stop-shop, as von Massow puts it. “You essentially pay for that convenience,” he said.
He points out that produce would fall into this category too, which a Loblaws spokesperson echoed on Friday afternoon, stating, “unlike a dollar store, we offer customers a wider choice of products, including fresh meat and produce and have higher operating costs due to the size and make-up of our stores.”
Dollarama - $3.50
Loblaws - $5.49
Cereal sold at a Dollarama in Toronto.
Non-dairy milk drinkers at Dollarama will have better luck with oat milk. A carton of Earth's Own original oat milk costs $2.50 at Dollarama.
In the health section at Loblaws, shoppers will find the same product for just under 50 cents more, priced at $2.99.
Dollarama - $2.50
Loblaws - $2.99
Oat milk sold at Loblaws.
A Quaker Dipps chocolate chip granola bar costs $2 for a pack of five at Dollarama and $3.49 at Loblaws. Or, two boxes for $5.50.
Buying two boxes of the granola bars at Dollarama is cheaper, but von Massow said it’s worth noting that customers factor in loyalty programs when making decisions about pricing, with more than one billion PC Optimum points given out last year.
One of the major criteria in loyalty programs is “basket-size,” as von Massow puts it. “They make money on selling you more things … to get you to come back,” he said.
Dollarama - $2
Loblaws - $3.49
Dipps granola bars sold at Loblaws in Toronto. CTV News Toronto reached out to Dollarama for comment but did not receive a response before publication.
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