A recent online comparison of merchandise prices at Dollarama and Loblaws in Toronto has stirred attention, revealing that some food items are twice as expensive – or more – at the big box grocery chain.
Although Dollarama, a discount chain store, and Loblaws, a grocery supermarket, are not direct rivals, a comparison to understand the difference in prices was undertaken by visiting their respective locations in downtown Toronto.
A striking disparity was observed in the price of pasta. At Dollarama, a bag of Italpasta spaghetti weighing 450g cost $1, a stark contrast to the identical product at Loblaws that retailed at $4.49 – more than quadrupling the price. Loblaws, however, also provided the same pasta weighing 2.27 kg for $7.99.
As Mike von Massow, a food economist at the University of Guelph, rightly pointed out, this could be seen as an advantage for those buying in bulk or a disadvantage for individuals who cannot afford to spend as much during a single visit to the grocery store.
A similar pattern emerged in the pricing of rice. A packet of Ben’s Original rice at Dollarama was priced at $1.75, which contained slightly more than an average serving size of 132 g. The same product at Loblaws cost $4.49 for a single bag, $9.99 for three bags and $10.49 for a bag weighing 2.2 kg.
The price of a loaf of Wonder Bread (675 g), both white and whole wheat, was $2.50 at Dollarama. At Loblaws, the identical product cost $3.99 for a loaf or $7 for two loaves. And while the bread was cheaper at Dollarama, Loblaws held competition using their in-house brands; for instance, their original No Name bread cost $2.79 for a 675g loaf.
The price difference extended to cereal as well. A box of Quaker Life cereal cost $3.50 at Dollarama, compared to $5.49 for an identical size at Loblaws. However, convenience was on Loblaws’ side. As von Massow put it, by selling milk along with cereal and other grocery items, Loblaws made itself a one-stop-shop, and customers essentially paid for this convenience.
In the non-dairy milk segment, Dollarama’s pricing was more advantageous for oat milk lovers. A carton of Earth’s Own original oat milk was priced at $2.50, compared to $2.99 at Loblaws.
Finally, Quaker Dipps chocolate chip granola bars, sold in five-pack boxes, were priced cheaper at Dollarama as well at $2 compared to $3.49 at Loblaws. However, Loblaws’ appealing loyalty program, which last year dished out over one billion PC Optimum points, is something customers factored into their pricing decisions, von Massow noted.