Dollar Tree Raising Some Prices to $7 as 6-Figure Earners Flock to the Discount Store
Dollar Tree is raising its prices again to $7, up from the $5 price ceiling set in June.
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In the company’s most recent earnings call, executive chairman and CEO Rick Dreiling said the increase was part of Dollar Tree’s “multi-price point strategy” to offer shoppers a more “relevant assortment,” Business Insider reported. He also noted that most of Dollar Tree’s new shoppers in 2023 came from households earning more than $125,000 per year.
“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.
Higher-priced items will include food, snacks, beverages, pet care, personal care and more. Despite the increase, Dreiling said the “vast majority” of Dollar Tree’s products will remain at the entry price of $1.25.
Dollar Tree also announced that it is closing 1,000 Family Dollar stores, representing 12% of its total store count. The company also said in the earnings call that it continues to deal with increased theft at Family Dollar, which is only one of many factors behind store closures. As a result, the company has locked up certain products and placed others behind registers.
The company reported a fourth-quarter net loss of $1.71 billion and a net loss of $998.4 million for fiscal year 2023, Supermarket News reported. In February, Family Dollar also agreed to pay over $41 million in fines after pleading guilty to keeping food, drugs, medical devices and cosmetics under unsanitary conditions at its West Memphis, Arkansas, distribution center.
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More High Earners Shopping
As prices for food and other household goods increase, more high earners are shopping at discount retailers, including Dollar Tree, Aldi and Five Below.
InMarket, which tracks retailer foot traffic, measured a 4% average increase in dollar store visits last year among those making more than $100,000, compared with the second half of 2022, according to The Wall Street Journal. Daily surveys from Morning Consult of about 50,000 Americans revealed that households with six-figure incomes were 15% more likely last year to say they would shop at dollar stores than they were in June 2022, going from 39% to 45%.
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Wealthy Americans have viewed discount stores as “not for them,” Michael Liersch, head of advice and planning at Wells Fargo, told The Wall Street Journal. But not anymore. “These days, it’s about making the most of your money and not getting ripped off,” Liersch said.
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This article originally appeared on GOBankingRates.com: Dollar Tree Raising Some Prices to $7 as 6-Figure Earners Flock to the Discount Store
