Dollar Tree has recently announced that it will increase the maximum price for some of its items from $5 to $7. This decision was revealed during the company’s fourth-quarter earnings call and marks another notable change in the company’s strategy. This price adjustment comes after the increase to a $5 cap in June 2023 and the 2021 rise from the long-standing $1 to $1.25.
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Dollar Tree plans to diversify its product offerings by introducing a multi-price assortment. The latest adjustment includes over 300 items priced between $1.50 and $7, featuring various products like food, pet, and personal care items. During an earnings call on March 13, the CEO of Dollar Tree, Rick Dreiling, explained the expansion plans in detail. He stated that across 3,000 stores, they expect to expand their multi-price assortment by over 300 items. Dreiling also envisioned integrating multi-price merchandise into the stores, where customers would find $5 bags of dog food alongside the traditional $1.25 pet treats and toys, PEOPLE reported.
This pricing strategy seems to be targeting a broader demographic, as Dreiling highlighted the company’s “fastest-growing demographic” as individuals earning over $125,000 annually. This shift in customer base aligns with findings from InMarket, which reported a 4% average increase in dollar store visits by consumers earning more than $100,000 between the second halves of 2022 and 2023, as reported by The Wall Street Journal.
In addition to the pricing and product assortment changes, Dollar Tree announced the closure of around 600 Family Dollar locations, a brand it acquired in July 2014 for $8.5 billion. The closures, attributed to factors including lease expirations, will also see approximately 400 Family Dollar and Dollar Tree locations shut in the upcoming years. The affected Family Dollar stores span multiple states, from New Jersey to West Virginia.
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Despite these closures, Dollar Tree has continued to expand its footprint, opening 219 stores in the fourth quarter ending February 3, 2024, and 641 stores overall over the past year. The company also plans to make $3 and $5 center-store merchandise available at approximately 5,000 Dollar Tree stores and offer $3, $4, and $5 frozen and refrigerated items at over 6,500 locations, showcasing its commitment to broadening its product range while adjusting its price cap strategy.
Social media users reacted to the price hike and said they might reconsider their options when shipping at Dollar Tree: