Dollar Tree announced in March of 2024 that it will raise the price cap on products in its stores to $7. The news came during the store’s fourth quarter earnings call on March 13th.
The new $7 price cap will encompass a variety of products, including food, snacks, beverages, pet supplies, and personal care items. Not all products will cost $7. The “vast majority” of products, according to Dollar Tree CEO Rick Dreiling, will remain at $1.25.
“This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” Dreiling said in the earnings call.
“Over time, you will also see us fully integrate multi-price merchandise more into our stores so our shoppers will find $5 bags of dog food next to our traditional $1.25 pet treats and toys, and our $3 bags of candy will be found in the candy aisle,” Dreiling said.
The price increase comes as Dreiling says the majority of Dollar Tree’s new customers in 2023 came from households that earn more than $125,00 a year. Dreiling stated that offering products at different price points gives customers a more “relevant assortment.” He also noted, “The fastest-growing demographic is north of $125,000 a year in income. It’s not like the Northeast is strong and the West is weak. That boat is lifting pretty even all the way up.”
This price increase comes after a $5 price cap had been set in June of 2023, according to Yahoo Finance.
Dollar Tree, which once sold everything for just $1, raised its prices storewide to $1.25 between 2021 and 2022. Then, sometime after that, Dollar Tree gradually began introducing select products at $3 and $5 price points, calling it the Dollar Tree Plus line.
The increase in higher-earning households shopping at dollar stores tracks with research. Yahoo Finance reports that InMarket, which tracks retailer foot traffic, noted a 4% average increase in dollar store visits between the second half of 2022 and 2023 among people who make more than $100,000, compared with the second half of 2022. Yahoo Finance also reports that surveys from Morning Consult indicate that households with six-figure incomes were 15% more likely last year to say they would shop at dollar stores compared to June 2022, an increase from 39% to 45%.
OMG! And just how do they know what people are making? I have never been asked, nor would I say if I was asked! And furthermore, why does that matter? Why raise prices based on that anyway? I go to the Dollar Tree to buy dollar store stuff with dollar store prices, not prices comparable to Walmart! I am NOT impressed with this move, Dollar Tree! You will lose business due to this wrong marketing decision.