(Reuters] – Canada’s Dollarama Inc stated Wednesday that additional price points would be introduced up to C$5 for this year. This is in response to rising inflation. Dollarama Inc sells everything, from party supplies to kitchen necessities, at a discount of C$4.

In order to keep their wallets from being hurt by the downturn caused by the pandemic, many discount shops have increased prices. They have also been selling more expensive items in an effort to make up for lost margins.

Dollarama’s U.S. counterpart Dollar Tree Inc In an effort to offset spiralling freight costs, (NASDAQ:) raised the prices of most products to $1.25 last year.

Dollarama is a Montreal-based company that has more than 1,400 Canadian stores. Dollarama projected a drop in gross margins during its fiscal year 2023 and said it expected supply chain pressures and inflationary pressures will be greater this year.

According to the company, its annual gross margin is expected to range between 42.9%-43.9%. In the financial year ending Jan. 30, it reported a gross margin 43.9%.

Dollarama was also boosted by holiday-quarter increases in spending and price-sensitive shoppers who sought to purchase everyday necessities at a lower rate. As consumers began to pay more for everything, from clothes to cooking sauces, the prices have risen.

Analysts had predicted that the Dollar Store chain would see a 11% jump in fourth-quarter sales. This was despite new COVID-related restrictions which hampered footfalls in stores this holiday season.

From C$1.10billion a year ago, sales rose to C$1.22billion ($977.64m) during the third quarter.

Dollarama, exempting all other items, earned 74 Canadian Cents per Share in the three-months to Jan. 30, exceeding estimates of 71 Canadian Cents per Share.

($1 = 1.2479 Canadian dollars)