Dollar Tree is planning to introduce items with price points ranging from $1.50 to $7 in 3,000 of its stores. The company has been expanding its multi-price assortment, with most items remaining at the $1 price point, but with some items priced higher. This move is part of Dollar Tree’s strategy to present a more relevant assortment to consumers at varying price levels. The CEO, Rick Dreiling, mentioned that Dollar Tree has already been selling frozen and refrigerated items at $3 to $5 price points in over 6,500 locations across the country.
In addition to the $1.50 to $7 price range, Dollar Tree has also been offering $3 and $5 “center-store merchandise” at about 5,000 locations, with plans to expand to 2,000 more stores in 2024. Dreiling stated that introducing different price levels and more variety has attracted higher-income shoppers to Dollar Tree, with those earning above $125,000 being the fastest-growing demographic. Data from Numerator revealed that customers tend to visit Dollar Tree about 20 times a year, spending an average of $281 during those visits.
Despite its efforts to attract more customers with new price points and assortment, Dollar Tree has been facing challenges such as shoplifting. The company has taken a defensive approach to address this issue, while also focusing on revamping its two brands, Dollar Tree and Family Dollar, through various initiatives. For Family Dollar, plans include closing over 900 locations for optimization. Dollar Tree reported $30.6 billion in total revenues for fiscal 2023, marking an 8% increase year over year, but also incurred a net loss of $998.4 million for the year.
The expansion of Dollar Tree’s multi-price assortment comes after the company had previously set the upper limit at $5 for its products. Dreiling emphasized that despite the introduction of higher price points, the majority of items in Dollar Tree stores will remain at the $1 entry-level fixed price point. The company plans to fully integrate multi-price merchandise in its stores, with $5 bags of dog food next to $1.25 pet treats and toys, and $3 bags of candy in the candy aisle.
Overall, Dollar Tree is aiming to provide a more diverse and relevant assortment of products to its customers, catering to different price points and income demographics. With plans to expand its multi-price assortment in thousands of stores and attract higher-income shoppers, the company is focused on driving growth and improving its overall performance. Despite challenges such as shoplifting and the need for brand optimization, Dollar Tree remains committed to offering value to its customers while adapting to evolving consumer preferences and shopping behaviors.