- Dollar Tree will start selling items for $7 in stores across the US, for example
- Last year it saw more shoppers with household incomes higher than $120,000
- The CEO said the company wants to sell products for $10 in the coming years
Dollar Tree has said it will raise the top price it charges for items to $7 due to an increase in the number of wealthy customers visiting its stores.
While the majority of items sold by the discount retailer cost $1.25 after a price increase in 2021, certain items started costing as much as $5 starting last June.
In the coming months, other items including food, snacks, beverages, pet care and personal care could cost up to $7.
And the company aims to eventually sell products for $10, its CEO told investors during an earnings call this month, which would mark a significant departure from the dollar store concept.
Dollar Tree said this week it would raise the price limit on the items it sells to $7
Dollar Tree CEO Rick Dreiling (pictured) said the company plans to sell items for as little as $10 in the coming years
“This year, we expect to expand our multi-price range in 3,000 stores with more than 300 items at prices ranging from $1.50 to $7,” said CEO Rick Dreiling.
“Our customers will find $5 bags of dog food in addition to our traditional $1.25 pet treats and toys, and our $3 bags of candy will be in the candy aisle,” he said.
He justified the decision by saying that the fastest growing demographic of Dollar Tree shoppers in 2023 would be those making more than $125,000 a year.
According to Dreiling, such wealthy shoppers bring “firepower.”
“I think that appeal has to do with multiple pricing and the fact that we’ve been able to increase the variety of products in the store,” he said.
For 35 years, products in Dollar Tree cost no more than one dollar, but in November 2021 the retailer increased that by a quarter to $1.25.
Although this move was controversial, it paid off: it not only boosted sales, but also allowed it to stock a wider range of products.
“Our move to the $1.25 price point has allowed our sellers to dramatically increase value,” former CEO Michael Witynski told investors a year later.
The majority of products in Dollar Tree stores cost $1.25, but last year the limit was increased to $5
Then last June it significantly raised the limit to $5 for some frozen and refrigerated foods, executives said at the company’s investor day.
According to a slide it published last June, it planned to fill its freezer and refrigerator sections with higher-priced items, which would cost $3, $4 and $5.
Dreiling told investors that the $10 price limit is still in the retailer’s sights.
“We continue to believe in the $10 goal that we announced … and we continue to march toward that goal,” he said.