DOLLARAMA

Hazard

Strategic

Amendment to normal course issuer bid, changed the 2015 - 2016 NCIB to allow max number of common shares to go from 6.5 million to aprox. 11.8 million

Adverse result from relationship with El Salvador based Dollar City

Potential cashflow issues from recent 11.1% dividend increase from 9 to 10 cents per share

Risks from move to the untested price cap of $3.50-4 for all products from previous cap of $3

Risk of choosing an unsuitable location for a new store or losing a potential profitable location to a competitor

Financial

Potential increases in shipping and handling costs associated directly with fuel price fluctuations

Foreign exchange risk from fluctuations in $CAD $USD relative valuation

Potential increase in equity from amendment to allow max number of common shares to go from 6.5 million to approximately 11.8 million

Increase in mandated minimum wage (as almost all store employees are paid minimum wage)

Inflation, large purchases made in China as well as other Asian markets. Large fluctuation home ad abroad could play roles in financial outcomes

Brand damage due to issues with quality, reliability or ethics of products and suppliers

Operational

Supply chain disruptions, because most products are shipped and imported a large number of factors could hold up sections of the supply chain that bring in business merchandise

Errors in merchandise selection and replenishment, identifying the volume and consumer needs in a timely manner

Increase in rent and occupancy costs on their store locations the majority of which are leased

Potential issues surrounding appointment of new president and CEO, Neil Rossy (as of May 01 2016)

Unprepared for peak seasonal sales, since the majority of sales come during the fourth quarter, as well as in times of major holidays (Christmas, St. Patrick's day, Easter etc.)

Risk of high level of indebtedness because as of the end of the 2016 fiscal quarter Dollarama long term debt amounted to about $1.2 billion

Risk of reliance on key personnel and the indirect effect of business interruption should a board member or executive be incapacitated

Attempted unionization of retail store or distribution centre employees

Potential issues stemming from construction of new warehouse, i.e. wasn't constructed to code

Potential litigation resulting from injury or harm caused by a product purchased at Dollarama

Worker injury at retail stores or distribution centres

Damage to merchandise within warehouses and distribution centres from natural hazards or catastrophe.