Dollar Tree raises price cap to $7 for high-earning customers

Dollar Tree may soon stop seeming like a bargain.

The discount store announced a price increase to $7 due to an influx of higher-income customers according to its fourth-quarter earnings release in early March . The company intends to raise its price range for food, pet supplies and private care products.

“We expect to add more than 300 items across 3,000 stores this year at various prices ranging from $1.50 to $7,” CEO Rick Dreiling explained through the call.

This raise Come after According to Yahoo Finance, the shop set a $5 limit in June. While the corporate initially set product costs at $1, it has since increased to a brand new base price of $1.25. However, prices vary depending on quality and content.

Dreiling added: “Over time, we are going to see us fully integrate multi-price merchandise into our stores, so our customers will find $5 bags of pet food alongside traditional pet treats and toys for $1.25, and our bags of candy for $3. dollars will probably be present in the candy aisle.

The reason for the sudden change is that higher-income persons are becoming regular customers of their stores. Dreiling mentioned that the fastest-growing demographic of its customers earns greater than $125,000 a 12 months. According to l, wealthy clients proceed shopping on the dollar store for bargains, at the same time as inflation falls.

However, prices of on a regular basis goods remain higher than in recent times. Consumers are adopting latest spending habits due to volatile food market costs. The trend of everyone buying at probably the most reasonably priced price has now moved to Dollar Tree.

The news also comes after the corporate recently announced mass closures of its Family Dollar brand stores – nearly 600 locations in 2024. Dollar Tree locations will close and their leases will expire over the following few years.