Dollar Tree customers will start to see some items carrying $7 price tags on the discount retailer’s shelves later this year.
That will be the case for 3,000 stores, where CEO Rick Dreiling said Dollar Tree "expect[s] to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7."
The company, which also operates the Family Dollar brand, has been introducing products that come at costs above its $1.25 price floor. The upper limit had been $5 prior to the upcoming initiative, according to reports.
"But even as our multi-price assortment expands over time, the vast majority of the items sold in Dollar Tree stores will remain at our entry-level fixed price point," Dreiling said of the new $7 upper limit. "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."
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Dollar Tree has been seeking to "present a more relevant assortment" to consumers at varying price levels, according to the CEO.
Under the multi-price point strategy, Dreiling told analysts and investors that Dollar Tree has previously had over 6,500 locations around the country selling frozen and refrigerated items at $3 to $5 price points. The brand will continue to expand those offerings, according to the CEO.
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About 5,000 Dollar Tree locations also began offering $3 and $5 "center-store merchandise" last year, with 2,000 more slated to do the same in 2024, he said.
Dreiling also said that Dollar Tree’s introduction of different price levels and more variety has helped draw more higher-income shoppers. Those with incomes above $125,000 were the "fastest-growing demographic" for Dollar Tree, he said.
Data from Numerator found that customers tend to visit Dollar Tree about 20 times a year, spending $281 during those visits.
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The company has been working to revamp its two brands through various initiatives. For Family Dollar, one of those will include shuttering over 900 locations for "optimization."
Dollar Tree brought in $30.6 billion in total revenues over fiscal 2023, marking an 8% increase year over year. Meanwhile, it saw a net loss of $998.4 million for the year.
