Dollar Tree announced plans to raise the price cap in its stores to $7 in its fourth quarter earnings call earlier this month.
via USA Today:
“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,” Dollar Tree CEO Rick Dreiling said in the call on March 13.
A $5 cap was set in June, according to Yahoo Finance. In 2021 the company raised the base price of items to $1.25.
The higher cost items will include food, pet and personal care items, though not all items will be at the $7 price cap.
“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.
Dollar Tree executives said on the call that the demographics of their customers trended towards higher income brackets.
“The fastest-growing demographic is north of $125,000 a year in income,” said. “It’s not like the Northeast is strong and the West is weak. That boat is lifting pretty even all the way up.”
The observation matches trends in the discount retail industry.
InMarket ? a firm that tracks retail traffic ? measured a 4% average increase in dollar store visits by consumers making more than $100,000, between the second half of 2022 and 2023, according to The Wall Street Journal.
The company said that it would close approximately 600 locations under the Family Dollar brand this year in the earnings call. The company also announced the closure of approximately 400 Family Dollar and Dollar Tree locations over the coming years as leases expire in the earnings call and press release.
If this isn’t a sign of our trashed economy, we’re not sure what is.
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