Yahoo Finance Dollar Tree Raising Prices: What To Know About the $7 Items
On a recent earnings call, Dollar Tree CEO Rick Dreiling announced the expansion of the company’s multi-price point strategy. The store will now offer goods priced up to $7. This is one of several changes to hit the discount retailer since 2021. Three years ago, customers, who largely use Dollar Tree to save money, were dismayed when the store raised the price tag on items to $1.25. Prior to that, all items had traditionally been priced at $1.
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Over the course of 2023, under Dreiling’s leadership, the store rolled out its new pricing strategies. According to the earnings call, merchandise priced between $3 and $5 was introduced at around 5,000 Dollar Tree locations nationwide. The company hopes to continue the program by offering even more options in the higher price ranges.
To avoid sticker shock the next time you walk into your local Dollar Tree, here is what you need to know about the $7 items.
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Is the Dollar Tree Raising Prices?
Dreiling announced on the call that the store would increase the price ceiling on its items from $5 to $7 by the end of the year. Three thousand stores across the country are expected to see the price point increase. Unlike a few years ago, however, the price of products themselves is not increasing. The store is simply hoping to offer a wider selection of goods to its customers.
“One of the most important initiatives at Dollar Tree is our multi-price point strategy, which we’re calling more choices,” Dreiling explained. “The underlying premise here is that we can present a more relevant assortment to our customers if we are free to offer items at a variety of price points.”
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What Items Will Be $7?
The higher-priced items available at Dollar Tree will likely come from various sources. As noted by the CEO, consumers may find multi-price options in “food and snacks, beverages, pet care, personal care, and more.” Last year, the store completed its rollout of multi-priced frozen and refrigerated items in over 6,500 stores. The items were priced at $3, $4 and $5.
It also introduced “center store merchandise” priced at $3 and $5. The store plans to continue expanding these choices for customers in more areas and increase the price ceiling to $7 by the end of 2024.
“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,” the CEO stated.
Why Is Dollar Tree Raising Prices?
Unlike the 2021 price hike from $1 to $1.25, the new increases are related to a wider variety of products for consumers. On the earnings call, the CEO said that the company had been successful in attracting “new and higher-income customers.” Data shows that Dollar Tree added 3.4 million new customers, many of them “from households earning over $125,000 a year.”
Dreiling attributed this trend to the new initiatives being implemented by the brand, including its multi-price point strategy.
When Will the Price Increase Take Effect?
The new products and pricing are expected to take effect this year at over 3,000 Dollar Tree locations in the U.S. It is not clear when the rollout will be complete for all stores. Although, the $3 and $5 pricing strategy for center store goods has been introduced at over 5,000 stores already, with it being planned at another 2,000 this year.
Will All Merchandise Be More Expensive at Dollar Tree?
If you are one of the many customers who are less than thrilled about the potential for higher-priced items at Dollar Tree, the CEO was quick to point out, “the vast majority of the items sold in Dollar Tree stores will remain at our entry-level fixed price point.”
The current entry-level fixed price point is $1.25. The changes are expected to bring “new items, more choices, and more savings,” according to Dreiling.
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This article originally appeared on GOBankingRates.com: Dollar Tree Raising Prices: What To Know About the $7 Items
