April 4 (Reuters) - Dollarama ( DLMAF ) forecast annual

and quarterly sales above estimates on Thursday, betting on

consistent demand for its discounted groceries and essentials.

Discount store operators have seen steady demand, even as

other retailers struggled with softer sales as cost-conscious

consumers increasingly stick to a budget when shopping.

Consumers in Canada and the United States have been looking

for cheaper deals on items, ranging from cleaning supplies to

groceries and apparel as they fend off steeper costs of rentals

and fuel.

The Montreal-based discount store operator reported

quarterly sales of C$1.63 billion ($1.21 billion), up from

C$1.47 billion a year earlier, while analysts on average

estimated C$1.61 billion, as per LSEG data.

Discount retailers are effectively tapping into consumer

preferences for cost-effective shopping, seizing market share

from traditional department stores, in the face of soaring

interest rates, analysts note.

Off-price retailers in the U.S. such as TJX exceeded

quarterly results as thrifty shoppers hunt cheaper apparel,

cosmetics and gift deals.

Excluding items, Dollarama ( DLMAF ) posted an adjusted profit of

C$1.15 per share for the quarter, above expectations of C$1.06

per share.

Its gross margin was 44.5% of sales, compared with 43.5% in

a year-ago quarter, due to lower inbound shipping costs.

The company expects annual comparable store sales growth in

the range of 3.5% to 4.5%, largely above analysts' estimates of

3.73%.

($1 = 1.3498 Canadian dollars)