Dollar Tree is more like $7 Tree as value chain lifts its price ceiling

Shopping at Dollar Tree is going to require a few more dollars in the coming months.

The discount chain, on its earnings call Thursday, announced it was increasing its top-level price on items from $5 to $7 as part of its “multi-price expansion strategy.” More than 300 items will see price points from $1.50 to $7 this year.

“This expanded assortment will offer Dollar Tree shoppers a wider range of choices across a variety of categories,” said CEO Rick Dreiling. “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. This is the next exciting chapter of the Dollar Tree value story: new items, more choices, and more savings.”

Most items in the store, he added, will remain at the “entry-level fixed price point” of $1.25.

The news of the higher prices comes on the heels of an announcement earlier this week that Dollar Tree plans to close nearly 1,000 stores of its subsidiary Family Dollar stores. That chain was recently fined more than $40 million for a rat infestation at a warehouse, forcing hundreds of stores to close temporarily.

The chain has also been in hot water with OSHA, the Occupational Safety and Health Administration, for hazardous conditions, including blocked exits and improper access to fire extinguishers.

Same-store net sales at Dollar Tree stores climbed 6.3% during the fourth quarter of 2023. Those gains, though, were offset by a 1.2% drop in sales at Family Dollar stores. Dollar Tree stores target middle-income shoppers, while lower-income consumers make up a sizable percentage of Dollar Tree’s customer base.

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