Features | From Pivot Magazine

Inside Canada’s dollar store wars

Is novelty enough to lure shoppers from Canadian bargain giants to a stylish new Japanese-inspired discount store?

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Inside view of a popular Dollar store Oomomo in JapanOomomo’s average price per item is closer to three dollars, since 90 per cent of the products are imported from Japan, where manufacturing is more expensive than in China (Photographs by Kayla Rocca)

Oomomo, a Tokyo-style dollar store named after the Japanese word for big peach, looks anything but cheap. Its most recent outpost, in Toronto’s Don Mills neighbourhood, is an airy, sun-lit space dotted with blond-wood display shelves. J-pop beats fill the bustling store as clusters of students and young families peruse each department—crafts, toiletries, snacks, housewares—hunting as much for novelties as for discounts. The wares themselves—pastel-coloured ceramics (tea sets, decorative bowls), Asian snacks (like Pejoy, which are inverse Pocky sticks with chocolate on the inside), and a wide array of crafting supplies (erasers shaped like sushi)—are a step up from what you’d find at an ordinary dollar store. 

But “dollar store” is a bit of a misnomer. Oomomo’s average price per item is closer to three dollars, since 90 per cent of the products are imported from Japan, where manufacturing is more expensive than in China. Some items cost as much as $15. This has retail watchers wondering whether this Vancouver-based chain, which launched in the summer of 2017 and already has five Canadian outlets—it also has two in Edmonton and two more in B.C.’s Lower Mainland—will survive in Canada’s increasingly crowded discount market.

Low-cost shopping is big business. Between 2012 and 2017, sales at stores such as Giant Tiger and A Buck or Two grew at twice the national average. Through 2022, that growth will continue to outpace other retailers by as much as 50 per cent, according to management consulting firm Kantar.

But it’s highly competitive and increasingly international. Canada’s largest homegrown dollar store, Dollarama, plans to open 60 to 70 stores per year, to take their count from 1,203 today to 1,700 by 2027. 

At the same time, China-based Miniso plans to expand its 50 Canadian locations to 500 stores in the coming years, and U.S.-based Dollar Tree is considering quadrupling its 220 locations to close to 1,000.

That makes Oomomo, which wants to expand to 30 stores by 2022, seem almost timid. But it’s bucking the conventional approach of opening as many shops as possible and using that scale to keep prices low and drive market share. Instead, it’s carving out a specific niche. It wants to be a destination discount store, appealing to consumers with its stable of Japanese items that aren’t available anywhere else. 

That could be its secret weapon. “Culturally, Canadians are very accepting of diverse brands from around the world,” says Daniel Baer, an FCPA and partner at EY who specializes in retail. “And when a retailer can focus in on a specific marketplace and specific demographics, with specific products, it can do very well.” The go-slow approach may help, too, he adds: “It’s always good when a retailer takes the time to make the best decisions. We’ve seen a lot of high-profile entrants and expansions over the past few years. But not all of them have been successful.”

Because Oomomo is privately owned, there are no financials available. There are, however, other indicators that consumers are buying. When the Toronto store opened in December 2018, there were long lines snaking out the door—not something you’d see at a typical dollar store opening.


Here's what they're lining up for at Oomomo
It’s hard to make tofu exciting for kids, but the Tofu Decostamp allows young ones to stamp cute faces into their soy protein before it’s tossed into a stir-fry. $3 for four stamps.

Sakura ceramics are painted with delicate cherry blossoms—perfect for serving Japanese green-tea cookies and other little confections. $1 to $5 each.

Oomomo’s line of beauty products includes $1 DIY face masks with aloe, rice or rose extracts, and $5 “hair mascara” wands that give locks streaks of temporary colour.

The snack options are truly special, including matcha-flavoured Kit Kats for $2 and Striking Popping candy (50 cents per pack)—mouth-puckeringly sour confections that, like Pop Rocks, sizzle when they touch your tongue.
Oomomo dollar store product: Tofu DecostampOomomo dollar store product: Sakura ceramicsOomomo dollar store product: Hair mascara