Good morning and welcome to the Dollarama Fourth Quarter and Fiscal 2021 Results Conference Call. Neil Rossy, President and CEO; and JP Towner, CFO, will make a short presentation, which will be followed by a question-and-answer period, open exclusively to financial analysts. The press release, financial statements and management's discussions and analysis are available at dollarama.com in the Investor Relations section, as well as on SEDAR. Before we start, I have been asked by Dollarama to read the following message regarding forward-looking statements. Dollarama's remarks today may contain forward-looking statements about its current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements or any other future events or developments. Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believes are appropriate and reasonable in the circumstances. However, there can be no assurance and that such estimates and assumptions will prove to be correct. Many factors could cause actual results, levels of activity, performance, achievements, future events or developments to differ materially from those expressed or implied by the forward-looking statements. As a result, Dollarama cannot guarantee any forward-looking statements will materialize and you are cautioned not to place undue reliance on these forward-looking statements. For additional information on the assumptions and risks, please consult the cautionary statement regarding forward-looking information contained in Dollarama's MD&A dated March 31, 2021, available on SEDAR. Forward-looking statements represent managements' expectations as at March 31, 2021, and except as maybe required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. I would now like to turn the conference call over to Neil Rossy.

Thank you, operator and good morning everyone. We just completed a truly unprecedented year. There is no question that Dollarama like so many businesses was put to the test. Through the strength and dedication of our team, the resilience of our business model and the relevance of our brand to Canadians from all walks of life, I believe we have emerged stronger. At the outset of the pandemic, our team responded quickly and efficiently to implement a vast array of new operating procedures that protect customers and staff, so that we can continue providing Canadians with convenient access to affordable everyday essentials. From head office to our warehouses, from our distribution center to our stores, coast-to-coast, every team member contributed to our ability to adapt and evolve in a rapidly changing environment. The same can be said of our Dollar City team in Latin America. Early in the pandemic Dollar City, just like Dollarama was recognized as an essential business. The team on the ground acted quickly to support employees and adapt to strict and evolving measures put in place by the governments of Colombia, Guatemala and El Salvador. By their performance, Dollar City demonstrated both their agility in a time of crisis and their growing relevance to Latin American consumers looking for convenience and value. This bodes well for our long-term growth plans in Latin America, including the expansion of Dollar City's footprint into Peru where our market entry is imminent. As President and CEO, I am truly proud of our entire team for the solid financial and operational performance we achieved in fiscal 2021 ended January 31. Despite the roller coaster of events over the last 12 months, our annual sales increased 6.2% and same-store sales were up 3.2%. We delivered solid EBITDA and gross margin both in terms of absolute dollars and as a percentage of sales. This reflects Dollarama's attractive positioning as a destination both for essential goods and seasonal items. These results were achieved despite operating restrictions throughout the fiscal year and during our fourth quarter, which is historically our peak sales period of the year. For fiscal 2021, we invested 84 million in COVID-related measures, primarily impacting SG&A. Labor hours in stores were increased to allow the execution of daily cleaning and sanitization protocols. And we rewarded our staff both in stores and in our DC and warehousing facilities on a number of occasions. This included a four month wage increase for store and logistics employees and the equivalent for agency workers as well as a one-time gratitude bonus for store employees. Over and above COVID-related costs, we increased our logistics, seasonal bonuses in fiscal 2021 and permanently increased base hourly wages for all workers and our logistics operations. Despite these incremental costs, we reported solid net earnings and earnings per share. As restrictions are gradually lifted, our team is squarely focused on safely and profitably growing our sales input and our footprint across Canada and in select Latin American markets. We were pleased to announce this morning that we are increasing our long-term growth targeting Canada to 2000 stores by 2031. This is up from our previous target of 1700 stores by 2027. Our hard earned position as a weekly shopping destination for millions of Canadian families has been reconfirmed and strengthened by the pandemic. Our stores continue to deliver an exceptional payback period and perform consistently from coast-to-coast, whether they are older stores, or more recently opened locations. And despite the pandemic, we opened 65 net new stores in fiscal 2021 consistent with prior years. Based on our experience, our historical performance and what we see going forward, we feel very confident in raising our long-term store target at this time. We expect to achieve our growth objective by maintaining our current rate of annual net new store openings. Before I turn it over to JP, I would like to formally welcome him to the team. He joined us a few weeks ago, but I can assure you he has hit the ground running and we couldn't be more pleased to have him on-board. As you know, Michael has stayed on in an advisory capacity to ensure a smooth transition for JP and we thank him for delaying his well deserved retirement. We appreciate being able to count on Michael for a little longer, including on the call this morning and as a mentor to many at Dollarama. JP, over to you.

Thank you, Neil, and good morning everyone. I'm excited to join a very dynamic team and for the journey ahead. As part of my responsibilities, I look forward to meeting analysts and investors in person as soon as conditions allow. My goal is to maintain the high level of transparency and availability that have been the trademarks of Dollarama Investor Relations practice. I've been getting to know my colleagues during the past few weeks and I would like to thank the team for their welcome and support. I'm grateful for Michael's counsel and fortunate to sharing these great results for my first conference call with him by my side. So let's dive right in beginning with a review of the fourth quarter. Dollarama achieved solid financial results despite many new and stricter government imposed measures in response to the second wave of the pandemic. We began the fiscal 2021 fourth quarter with very strong momentum, posting 7% same-store sales growth for the first five weeks of the quarter, covering the months of November and the first week of December. Seasonal merchandise performed extremely well, taking off earlier in the quarter than historically. But within a matter of days and following the announcement of additional restrictions across Canada, this momentum was abruptly interrupted. It is important to understand that these new restrictions coincided with not just our peak sales quarter of the year but with the peak sales month December. Lockdowns and stricter in-store capacity limits were imposed in several provinces including Alberta, Ontario and Quebec in early December. New restrictions included a ban on the sale of non-essential items in Quebec, where we have approximately 30% of our stores. Even though the ban started on December 26, its impact on store traffic began to be felt quickly following its announcement in mid-December. As a result of these measures, same-store sales for the quarter declined by 0.2%, while total sales increased 3.6% and exceeded 1.1 billion driven by the increase in the total number of stores compared to the same period last year. Average transaction size increased by 27%, while the number of transactions or store traffic decreased by 21.4%. We are pleased to inform you that sales momentum picked up as soon as the stricter measures were lifted in the second week in the fiscal 2022 first quarter that is still underway. Gross margin was strong at 45.5% of sales, primarily driven by the performance of higher margins seasonal items. SG&A was 16.9% of sales and included 23.8 million of COVID-19 costs representing 215 basis point impact. This reflects additional in-store hours and the December 2020 gratitude bonus for store employees. EBITDA was 326.9 million, or 29.6% of sales, net earnings were 173.9 million and diluted EPS was $0.56. Earnings were negatively impacted by lower SSS and COVID-19 costs but positively impacted by higher margins, lower financing costs and a higher equity pickup of Dollar City net earnings. Looking now at full year results. Sales increased by 6.3% to over 4 billion. SSS was up 3.2% over and above the 4.3% growth recorded in fiscal 2020. SSS growth for the year consisted of a 29.1% increase in average transaction size and a 20.1% decrease in the number of transactions. Throughout the pandemic consumer shopping patterns evolved in line with public health restrictions, which generally resulted in fewer trips, but higher spending per store visit. SSS growth was driven by increased demand for seasonal items, as well as various essential goods categories including household and cleaning, health and hygiene and food. SSS for both the quarter and the year, exclude temporarily closed store. As you will recall a number of stores were closed during the first and second quarters as a direct result of government's measures, mainly the closure of malls, primarily in Quebec. No stores were closed due to the pandemic in the third quarter. During the fourth quarter and more specifically in January, Dollarama temporarily closed a limited number of stores, mostly in Quebec and in enclosed shopping malls where the majority of other businesses were closed at the time and were another Dollarama location in close proximity was open. These stores have since reopen. Gross Margin for the year was strong at 43.8% of sales and up 20 basis points due to higher sales of higher margin products. A small portion of COVID-19 costs are included in gross margin, namely for measures implemented throughout our operations, including in the logistics chain. SG&A was 16.2% of sales, which includes the bulk of our direct COVID-19 costs, or 81.1 million. This represents 200 basis points impact. EBITDA was 28.1% of sales, net earnings were up 0.1% to 564.3 million and EPS increased by 1.7% to 1.81 per share, reflecting slightly improved earnings and the accretive effect of our share buyback program. Turning to Latin America, our equity pickup of Dollar City earnings in fiscal 2021 came in at 19.7 million; despite disruptions to new store opening plans through the first half of 2020 due to the pandemic Dollar City opened 36 net new stores, bringing their total store count to 264 at December 31, 2020. Dollar City's long-term growth objective of 600 stores by 2029 in its three current countries of operation remains unchanged. Now back in Canada, following a careful evaluation of the market potential for Dollarama. Management believes that the corporation can profitably grow its Canadian store network to approximately 2000 store over the next 10 years or by 2031, with an average new store capital payback of approximately two years, which is consistent with our current and historical payback period. Factors taken into consideration in our evaluation among others, included census and household income data, the current competitive retail landscape, rates of per capita store penetration, historical performance of comparable and new stores and our current real estate pipeline. Looking at our capital allocation strategy, in fiscal 2021, and in the context of the pandemic, we adopted a conservative approach and did not repurchase any shares in the first three quarters of the year to preserve liquidity. In the fourth quarter, we repurchased 1.6 million shares for a total cash consideration of 87 million at a weighted average price of $53.67 per share leaving ample room in our current NCIB expiring in early July. Our adjusted net debt to EBITDA ratio at fiscal year end was 2.68x, 29 basis points lower compared to fiscal 2020 year end. As for the quarterly dividend, the board maintained that at the beginning of fiscal 2021 and announced a 6.8% increase in December 2020. This morning, we are coming back to our regular Q4 dividend increase and we are announcing another increase of 7%, bringing the quarterly dividend to $0.05 per common shares -- $0.0503 per common share to be precise. Looking at our debt structure as a reminder, we closed a new seven year bond financing for 300 million in the third quarter of fiscal 2021 to take advantage of favorable market conditions. This was a head of the maturity of 300 million of floating rate notes repaid this past February. We continued to actively manage our solid capital structure and we have a healthy balance sheet. The business continues to consistently generate excess free cash flow and as a result, varying factors outside of our control due to COVID-19. We intend to actively resume share repurchases in fiscal 2022 and we expect our adjusted net debt to EBITDA ratio to creep back up and to return to our target range of between 2.75x to 3x, which we are very comfortable with. Turning now to the outlook, due to continued uncertainty related to COVID-19, we have not provided guidance ranges for gross margin SG&A as a percentage of sales, or EBITDA margin for fiscal 2022 at this time. As demonstrated by the evidence of the fourth quarter, the pandemic scores can change very quickly, making its impact on some of our key metrics more difficult to predict and to quantify. But we can provide you with some color based on the first quarter under way, our experience through the first year of the pandemic and what we do have visibility on. Given our ability to open 65 new stores last year despite the pandemic, we are confident that we will once again meet our 60 to 70 net new store openings range for fiscal 2022. Looking at same-store sales, as mentioned, we had same-store sales of 7% after the first five weeks of the fourth quarter, but end of the quarter at negative 0.2% as a result of suddenly imposed stricter COVID-19 measures, especially in Quebec. As some of these measures were lifted in early February, our Q4 momentum return in full force coupled with an additional SSS catch up from the prior quarter, two months into the first quarter, same-store sales are in the low to mid teens, bearing any COVID-related factors outside of our control so such as what occurred in Q4, we expect a solid performance in terms of SSS for the first quarter. But keep in mind that we will be lapping tougher comps in Q2 and Q3 of fiscal '22. Looking at gross margin as a percentage of sales, the gross margin in fiscal 2021 was very strong and based on results to-date and visibility on open orders, we are also expecting a notable improvement in gross margin in the first quarter compared to the same period last year. We expect the gross margin improvement in Q1 to be in the same ballpark as what we saw year-over-year in Q4 fiscal 2021. This reflects the positive impact of changes in the sales mix. However, it is important to note that assuming raw material prices and inbound shipping costs remain at current levels or continue to increase. This will tamper our gross margins performance through the second half of the year. Looking at SG&A as a percentage of sales, excluding COVID-19 direct costs, we should be generally in line with the prior year although the first quarter should benefit from additional scaling on higher sales. Finally, our CapEx envelope is between 160 million to 170 million, which is in line with fiscal 2021 and will go towards new store openings, regular maintenance and some transformational CapEx. We will update you on our assumptions and hope to be able to provide more specific guidance across all key metrics concurrently with the results of our Q1 results in June. With that, I will now turn the call back over to Neil.

Thank you, JP. COVID-19 pandemic tested our resilience, drove home our purpose and the relevance of [indiscernible] to Canadians from coast-to-coast. I don't believe there has been a time in recent history during which the value and importance of proximity and convenient access to affordable everyday goods has ever been more important. This has reinforced the long standing appeal of our value proposition to Canadians across the country and ultimately, the enduring strength of our unique business model. This motivates us as a team to continue on our sustainable growth path. As Canada's leading value retailer, we will continue to grow our footprint to reach new customers and provide even greater convenience and to adapt to evolving market dynamics and consumer behaviors. With fiscal 2022 off to a strong start, we look to the future with hope and optimism as vaccination programs continue to roll out while continuing to adapt to the pandemic in order to protect and serve our customers and employees. With that, I'll now turn it over to the operator.

Thank you. We will now take questions from the telephone lines. [Operator Instructions] The first question is from Mark Petrie with CIBC.

Thanks for all of the commentary with regards to the outlook. I'm hoping you could just clarify, your comments with regards to SG&A for fiscal '22, and just provide a bit more color with regards to the timing and how that plays out through the year.

Hi, Mark, this is Michael. So in terms of G&A, obviously, there's the direct COVID costs that are part of this. And so going forward in Q1, if you look at Q4 was 23.8, you had approximately almost 6 million in terms of bonus that was given, so you're down to 17 million, 18 million-ish. So I think in that range for Q1, I think it's reasonable between 17 and 20. Now for the rest of the year, it's hard to say, depends on the restrictive measures, if those change or not, will impact it. But if you exclude any of the direct COVID costs, which is essentially the additional shift that we have in each store to manage physical distancing and the rest. I think it's safe to say that we've got enough initiative this year that we'd be able to offset the foreseen inflation, so stable to compared to last year. And yes, so that's kind of where, we think that is.

That's great. Thank you. And then, with regards to the comments on gross margin, you highlighted the sort of uncertainty with regards to the impact of inflation in manufacturing and supply chain for the second half of the year. Is that sort of expected to present sort of gross margin headwind? Or is there enough flexibility in the business to sort of preserve margin, but maybe just won't be as strong as it is in the first half of the year?

Okay, so maybe just to give you a bit of context, because there's a lot of stuff going on right now. So I think its worthwhile nuancing certain things. Let me begin with Q4, in Q4 what we saw is a notable increase year-over-year, the major part of the explanation is mixed change. In Q1, the same type of situation, in other words, if you recall, last year in Q1, the summer season was pushed to Q2 essentially and Easter performed poorly. This year summer is performing well to-date and Easter, also performing very well and Easter is a week in advance this year also. And with the catching up we did from non-essentials in Quebec in Q1, so this is why we mentioned that we expect a similar type of notable increase in Q1 like we did in Q4. However, here are the main differences moving forward, two things. One is Q2, Q3 and Q4 of last year had the impact of the positive sales mix, in other words, Q2 had strong summer season sales and even borrowed from the Q1 poor sells. Q3 have strong Halloween sales and Q4 have strong Christmas sells. So seasonal sales are a mix is already impacted. And in all three quarters Q2, Q3 and Q4 you had weak impulse sales, which are lowest margin items. So that's one element that will differentiate those three quarters to Q1. The other one is in Q4 and Q1, the markup margin has improved in most of the categories. And in Q1, we were able to offset those inbound shipping costs and inflation from our suppliers. But going forward, the unknown for now is, if those costs remain, what will be the impact of that, and if they even increase, so as you know, and that's why we mentioned a caution here for the second half of the year to make sure that through our refresh and markup strategy that we're able to offset. So, now in an ideal world and we'd be disappointed if we could not maintain the current F'21 actual margins, gross margin. And hopefully, we're able to do so. But there are still some unknowns in front of us.

Okay, that's great context. Thank you very much, Michael. And then, just one more question. With regards to the long-term store target, obviously, you've been through a challenging period, particularly with the performance of mall stores, as you think ahead to 2000 stores, can you just share any thoughts with regards to how the portfolio evolves with regard to composition and mix be it type of development or region, anything like that?

Well, so just to keep it very simple. It's going to be more or less like you've seen today. So the bigger composition of our chain and strip then stand alone, then malls. And it's super urban, suburban, rural, and it's more or less follows the population size in terms of opportunities for number of stores. So Ontario has the most to offer a number of stores than Quebec, than the western provinces and the Maritimes. And so I'd say it's more of what you've seen today. So nothing extraordinary or very different.

The next question is from Brian Morrison with TD Securities.

Michael, I want to follow up on your gross margin, because there is the omission of one key element there in your explanation. If I take a look at your hedge book, you're starting to see your contractual rate decline on your new hedges. And certainly if you take a look relative to Q1, Q2 and Q3, it's a substantial decline. So I hear you on your inflation with respect to shipping and raw materials. But in terms of a Canadian dollar inflationary environment, is it actually inflationary in terms of Canadian dollar terms?

Yes, so a good question, Brian. So the effect of the currency, as you know, we hedge out typically 8 to 12 months out. So, we've haven't -- we're going to see the impact of that more towards the end of the year. But that's all part again, of the refresh approach. So it's all considered by the buyers when they refresh. And so when we talk to you about, what we see coming up in the year it factors the currency movements. So there's nothing notable impacting this year. And even next year when we do the refresh, that will be a tailwind. And we'll consider it but then you'll have other headwinds, which will impact again. And so, it's almost -- it's always considered when we give you a color on the margins and we have time to see it coming so.

So would you say overall, the cost inflation is relatively neutral this year? And then just following up on that, when you talk about your rate of replenishment, when we do our store checks, there seems to be an awful lot of new products that are in there. I'm wondering if your rate of replenishment has increased from your standard rate of 25% to 30%.

No. So it's the same 25% to 30% that we see. And inflation, we're not saying there's no inflation, on the contrary, we're saying that, there is some steep inflation from the supply side, from the inbound shipping costs side and through our refresh strategy and markup strategy, we're able to offset some of them, some of that, which we've done very well, in Q4 and Q1, as I told you, Q4 and Q1 in most of our categories, our markup is higher than last year. So that's been going well, what we don't know is, the rest of the year, especially Q3 and Q4, we've got some color in Q2, but the impact of Q3 and Q4, we'll have to see as we move ahead.

All right. Thank you for that. And then last question, just your initial feedback, I think you put $3.50 and $4 price points in the Colombian market looks like your contribution, your equity pickup was very strong this quarter, wondering how that was received, and whether your early assessment might be to expand that into other countries?

Okay. So yes, the Dollar City is going doing very well. I mean, they've got challenges like we have here in terms of COVID and restrictive measures. And they fared extremely well, very happy about that. They opened up just in the last quarter 24 net new stores and so, very strong performance. Going ahead, we talked to you about Peru and that's a market that we will be opening up store shortly. And we will need, as we've done with the other countries to assess, how competition reacts how we fare and following that that will determine if we push ahead or not. So that's the color right there.

The next question is from Vishal Shreedhar with National Bank.

Just wondering with respect to the opening comment that were provided, management referenced that Dollarama has a stronger company as a result of this pandemic. Wondering as that was said, is that more of a reflection on management's perception just given their experience in retail? Or are there specific metrics that you could point to maybe customer perception surveys, or indications of better real estate prices, so on and so forth, that you can mention, which help us better understand why you said that?

Yes. Well, we mentioned a bit of that in our last call, we told you about a survey we got back that we do know, consistently from time to time, almost every year, where we have questions concerning COVID. So the responses were very positive, the value proposition, the convenience of having bigger chain more stores, so being closer and closer to our customers. And just recently in Canadian major survey, we were named 10 most popular brand in Canada. But like we told you too, and just from our results, we have a temporary situation in Q4 in position of restrictive measures. That did not impact the big business model. We told you coming out of it, not only did we immediately pick back the momentum at the beginning of Q4 and in Q3, but also caught up some of the missed sales in Q1. And it talks to our model the value proposition is still very strong. There's nothing going on structurally around us that would have us change our mix categories, the competitive dynamics, or anything of that nature. We still come up very strong and anxious to move out of this pandemic environment to further demonstrate that.

I'd also add that we've also come out stronger from the perspective that based on feedback from our employees at the distribution center or warehouses or stores, they've felt like we've had their backs the entire time that the team is as strong or stronger than it's ever been that we fought hard to ensure that the business would have all of the products required for both our customers and the protection of our employees that the measures we put in place were well received and appreciated and professionally executed. So I think our team is stronger at all levels because of this pandemic as well and they've appreciated the way we've navigated through these challenging times and always had their backs.

Okay. Thank you for that. With respect to the strong or the Q1 trends, is there a way for us to better understand to what extent maybe isolated number wise what extent that is some of the pickup from Q4 just shifting into Q1? And how much of the strength is due to strong kind of seasonal sales due to a warmer Q1 so far? Or is it any way for us to get a gauge on that?

Yes. So, JP mentioned earlier that we're in the low to mid teens and almost two months into the quarter and so assuming there's no additional restrictive measures like we've seen in January in Quebec for example or in Ontario and the other provinces. If things remain more or less the same, we'd be disappointed if we could not maintain that low teen SSS figure. And in terms of gross margin that's a bit of the same situation in other words we told you that the sales mix is impacting us positively for the time being we're against a quarter last year where Easter was almost a very low and we're already seeing Easter being strong right now and it's a weekend event also. And summer sales are doing very well which they weren't last year. So that means that we should end up with a notable increase like we did in Q4 in terms of gross margin.

Okay. I appreciate that and just lastly, assessment here on labor availability, are you seeing any changes in the market with respect to your ability to get labor in the stores and DC?

No. For the moment it's very stable and not an issue whatsoever.

The next question is from Irene Nattel with RBC Capital Markets.

Just to kind of beat this horse on same-store sales. It sounds as though essentially what you're saying is that if we move aside all of the COVID noise items that you couldn't sell, you could sell, we're shifting from one season to the other. Dollarama is back on track with what would have been kind of a normal historical rate of same-store sales growth. Is that a fair comment? Not a good sign Michael.

No. Well, it's not -- it's because there's so much noise right now that the shift in sales mix. I mean, yes, post-COVID for us it's continuing to perform as well as we've done historically. We don't see anything happening that would have us think otherwise just for the current period and because the year we just went through where you have had a lot of mix -- sales mix changes. So when I tried to describe those as accurately or as reasonably as possible, obviously, impact the quarter-to-quarter movements. Like I said, Q1, we're comping against a Q1 last year that was extraordinarily weak. So this year is extraordinarily high. But if you look at the averages, it's still pretty good, because of the reduction, the traffic decreased caused by the COVID. That has been impacting impulse sells. So once we're out of this COVID situation and traffic comes back into line, you'll see impulse sales coming back in, which are lower margin, and so you'll have more margin dollars, but it will impact your margin percentages. But otherwise, essentially, coming out of the COVID, it should be back to numbers that we've seen in the past.

Just following on the discussion around inflation, in the past, we've talked about what could trigger higher price points. And certainly inflation has been one of the factors that you guys have pointed to. So just wondering about your current thoughts around, let's say, $4.50, $5 price points, or however you want to just describe that.

Yes. So essentially, again, like we told you in the past, the idea is to, like we say, milk, our current price points that we have, up to $4, we've seen throughout the whole year, in every quarter, higher $4 sales than the prior year, higher $3.50 items sales than the prior year. So our penetration of higher price points have continued to perform very well. So there's no rush to move on to the [$4.5, $5] [ph] which we told you we will be doing. We're not ready yet to announce anything on that side. And it's out there. It's going to happen and we'll do it when we're ready. But you're right. Inflation also plays a role. It played a role back in August 2016, when we introduced the $3.50, $4 price point. And it's something that we monitor that can influence the introduction of the $4.5, $5 price point.

And then, finally, just a question on Dollar City. We're already up to 264 stores, the pace of store opening is accelerating once again, now maybe Peru gets thrown into the mix. And so when might we get an update on that store target can certainly that seems very reasonable, or what would trigger you guys to come out and say, yes, we're increasing that store target.

Yes. Well, for the time being, we're sticking with our 600 store target by 2029, which includes El Salvador, Guatemala and Colombia. It excludes Peru. Peru, we don't know yet. If, like we said, we're moving in, we're going to test the market. And if we see potential, then that would impact the future store target. And when we feel comfortable, we will update you on that. But for the rest for the time being where we're still at 600 by 2029.

The next question is from Peter Sklar with BMO Capital Markets.

I just have one question at this point. So this guidance you given on potential store footprints across Canada going from 1700 to 2000. And I understand like to use a consulting firm who looks at all the demographics and all the factors that you that you talked about and comes up with a number but really nothing much has changed in Canada. Demographically if anything, immigration has slowed, economic growth has slowed. So I'm just wondering what was the underlying factors that caused them to increase the limit? Like if you go like 2000 stores on 1700, that's like an 18% increase in store footprint, which is a lot. So there must have been something that really changed in the model. And like, the only thing I noticed that's changed is that you're going out a few more years. So maybe it's just more years of runway. Can you talk a little bit about, like you would have seen the details of their report?

Yes. So, yes, thank you, Peter. So I mean, when we -- each time we give you a store outlook, we thought where it's a 10 year forecast. So in every two or three years, we update that forecast. So it's not the saturation point. When we give you that target, it's where we think we'll be by 2031. So we went from 2027 to 2031. So all it is, is that and so it's not saturation, it's simply our best estimate. So we go above it, like JP mentioned, first we look at the current store pipeline, then we look at the addressable market. So that evolved, since the IPO. At the IPO, we only have price points that went up to $2. Now, we've got price points that go up to $4. So your addressable market is higher. And we look at population size, growth, retail activity. Yes, we use a consulting firm, but it's not -- we don't pick the consulting firms number, we use the analysis. But then, obviously, we've got a very competent real estate team internally, that will look at every single site, we'll look at the potential, look at competitive environment around it and filter that number to the level that we feel comfortable. And again, we look at two year average cash on cash paid back stores, which means that you'll have stores that pay back within one year and stores that pay back within four or five years. So and it's the average. So that's how we get to those numbers.

And often, the difference between two years and four years to give you a revision of our number is based on a question of us getting comfortable that whatever number we can give, we can execute on. So sometimes it's two years, sometimes we make you wait more years, because we want to ensure that the number we give you is a number that we're extremely comfortable that we can execute to the level that we execute.

Okay. And any changes in consumer behavior, as a result of what happened over the last year did that play into it or really COVID and the way the consumer behaves now really wasn't that play in your calculations?

No, it was not a factor whatsoever.

The next question is from Karen Short with Barclays.

Hi, good morning. This is actually Renato Basanta on for Karen and thanks for taking my questions. So just wondering if you can speak to what you're seeing from a competitive pricing perspective. I know historically, you've been a price follower. And you've talked about, additional markups today. But just wondering if you're seeing competitors also take more price given some of the supply chain pressures. And then to what degree are you seeing those price increases?

We're starting to see them. And we expect that to continue and of course, as you said, we're a price follower and therefore we will absorb, the impact of inflation until the new price point that we have to offer, if we do a markup is still the most competitive price. So we continue to be a follower and we're seeing inflation for sure. And as long as we feel comfortable that our next price point is a price point that keeps Dollarama's price extraordinarily competitive. Then it becomes an option for the buyers to use as a tool to help combat some of the headwinds that they have on a daily basis.

Okay, that's helpful. And then, I just might my second question is on wages. You mentioned some of the increases in 2020. And I think, historically, you've talked about a 3% increase in wages as being manageable for the business overall. So just wondering what level of wage inflation you're expecting this year. And then if you can remind us how you're thinking about sort of a company to leverage your overall fixed costs going forward? That would be helpful. Thank you.

Yes. We don't disclose the specific increases, but only to mention, it's nothing out of the normal. So obviously, we follow minimum wage increases across the chain, across the country, and then there are further adjustments if we need to bring them. So that where we're at in terms of labor and your -- other second part of the question?

Just the comp needed to leverage overall fixed costs going forward.

Again, well, we don't disclose the specifics of that either, sorry.

The next question is from Derek Dley with Canaccord Genuity.

Just following up on the new longer term store target. You mentioned, you're still targeting that two year payback on new stores? Can you comment on what the average store is doing in terms of revenue today? And maybe what it was doing in, I guess, 2016 2017 when you put out your last forecast?

Yes. So I say our average sales per store increased from 2017. I don't have it by heart, but it has increased. And today, we're approximately average 3 million per revenue per store. So our average, store sales have increased steadily since the IPO. And whereas our cost to open up a store of net of pending allowance has remained more or less stable since then. So our actual payback more recently, in the more recent two years -- for two year cohorts has improved year-over-year. So going forward, that definitely helps.

Okay. Well, that's good. I seem to recall a 2.7 million number per store, I think.

Yes, that would make sense by 2016, 2017, yes.

Yes. And then, in terms of the dynamics, and I know, it's difficult because you guys don't really have any sort of pure play, ‘dollar store peers,’ but outside. But the new incremental 300, are you seeing market share gains within your footprint? Or are you seeing just more demand from consumers for your offering, like what is sort of the dynamics that helped lead to that 300 increase?

While you have the introduction of higher price points, the penetration increase in higher price points. The fact that we've deepened the offer within each categories is definitely an element that helps. There's inflation over time, by 2016, 2017, we have the currency inflation, steep inflation back then and we have just introduced the higher price points, so that helped during that period of time.

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