The well-known budget store Dollar Tree is altering its pricing approach. The company revealed that it is increasing the price cap to $7 on specific items during its most recent earnings call. This comes after rises of $1, $1.25, and $5 in June 2021 and 2023, respectively.
During the call, CEO Rick Dreiling of the company stated, “We expect to expand our multi-price assortment by over 300 items this year, across 3,000 stores, at price points ranging from $1.50 to $7.” Food, pet, and personal hygiene item pricing will be impacted by this adjustment.
Dreiling added that Dollar Tree serves an expanding group of customers who earn more than $125,000 annually. This conclusion is corroborated by a recent InMarket study, which indicates that during the second half of 2022 and 2023, customers making more than $100,000 visited dollar stores 4% more frequently.
Dollar Tree intends to incorporate multi-price products more prominently in its stores to suit this larger variety of prices. For example, in addition to the customary $1.25 pet snacks and toys, consumers will now find $5 packages of dog food. In the same way, the candy section will have $3 bags of candy.
In the upcoming years, Dollar Tree plans to close about 600 Family Dollar outlets in addition to changing prices. In 2014, the business paid $8.5 billion to purchase Family Dollar. About 400 Family Dollar and Dollar Tree locations will close as part of this closure plan since their leases are expiring. The cities impacted are Middletown, New Jersey; Tallahassee, Florida; Peoria, Illinois; Lynchburg, Virginia; East Liverpool, Ohio; Wilmington, North Carolina; Slocomb, Alabama; Humansville, Missouri; Willow Springs, Missouri; Wichita, Kansas; Clearwater, South Carolina; and Elkins, West Virginia.
In 48 states and five Canadian provinces, Dollar Tree ran 16,774 locations during the fiscal year that concluded on February 3, 2024. 219 new stores were opened by the corporation in just the fourth quarter. In the future, Dollar Tree intends to provide “$3, $4, and $5 frozen and refrigerated items at more than 6,500 stores” in addition to making “$3 and $5 center-store merchandise available at approximately 5,000 stores.”
