Dollar Tree Hikes Max Price To $7 Amid Surge In Higher-Income Shoppers

ACROSS AMERICA — The massive discount retailer Dollar Tree is hiking its max prices, and customers can now expect to pay up to $7, company officials said at an earnings call this month.

"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," Dollar Tree executive chairman and CEO Rick Dreiling said in a fourth-quarter earnings call on March 13, according to multiple media outlets.

However, most Dollar Tree products will stay around $1.25, he said.

Dreiling said the max-price hike is part of a multi-price point strategy and will give customers a more "relevant" assortment to choose from.

"As we look forward in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar," Dreiling said in a news release.

Among the higher-priced items customers can add to carts: food, snacks, drinks, pet supplies and personal care.

"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," Dreiling said.

The move comes as the retailer sees an influx of higher income customers — and planned closures.

Dreiling said most of the chain's new customers last year were from households that earn over $125,000 per year.

"The fastest-growing demographic is north of $125,000 a year in income," he said. "It's not like the Northeast is strong and the West is weak. That boat is lifting pretty even all the way up."

Dollar Tree also announced it plans to close about 1,000 Family Dollar and Dollar Tree stores, estimating that about 600 Family Dollar stores will close this year, and an additional 370 Family Dollar and 30 Dollar Tree stores will close over the next several years.

Family Dollar has around 8,000 stores in the United States, and Dollar Tree operates more than 15,00 stores around the country.

Both announcements came after the company said late last year it would review and optimize its portfolio to identify struggling stores for closure, relocation, or re-bannering.

Dreiling has said "persistent inflation and reduced government benefits continue to pressure the lower-income consumers," who make up a large share of Family Dollar’s customer base.

"We finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments," Dowling said. "While we are still in the early stages of our transformation journey, I am proud of what our team accomplished in 2023 and see a long runway of growth ahead of us."