Canadian discounter Dollarama may have to raise its prices above CAD3 to offset the effect of the low Canadian dollar.

Dollarama chief executive Larry Rossy said the retailer may have to consider raising its prices above the CAD3 (£1.60) mark, during an earnings call last week. It has already had to deal with the effects of inflation by adding 25 cents to some of its CAD1 items, but Rossy said it would “hold out” increasing prices over $3 for as long as possible.

The retailer reported profit increase of 20% to CAD140.9m (£75.3m) in its fourth quarter ending February 1 2015, and sales increased by 15% to CAD669.1m (£357.5m). Meanwhile full-year profits grew 19% to CAD422.6m (£225.8m), while sales increased by 12.9% to CAD2330.8m (£1246.9m).

While reporting its financials, Dollarama also said the liquidiation of Target in Canada was having a short-term negative impact on the retailer, as consumers are taking advantage of closing down sales.

But Dollarama has its eyes on opening 400 additional stores in the coming years, raising from its current total of 955 stores across the country. The retailer opened 81 new stores last year alone.