Dollar Tree Raising Top Prices to $7 Amid Store Closings

Dollar Tree Raising Top Prices to $7 on Some Items

By now you’ve probably heard that Dollar Tree announced it is closing some of its Dollar Tree stores and Family Dollar stores nationwide. We have compiled our own, exclusive list of Family Dollar Tree stores closing although Dollar Tree has not officially released a list.

The Rising Price of Dollar Tree

In 2022, Dollar Tree increased prices from $1 to $1.25. The company stated that the price hike aimed to counter increased costs and enhance the quality of its products. This adjustment enabled Dollar Tree to reintroduce certain discontinued items and broaden its range of consumables, including meat, pizza, breakfast items, and more.

In 2019, Dollar Tree introduced Dollar Tree Plus items in certain U.S. stores. In 2021, the company announced it would have 500 Plus stores by the fiscal year end. As of March 2024, Dollar Tree has introduced Dollar Tree Plus sections to over 5,000 of its stores, with intentions to extend the range to additional stores in the future. These sections provide products at $3 and $5 price points.

The latest 2024 news includes Dollar Tree’s plan to again increase prices after closing nearly 1000 stores. This increase will see the $3 and $5 items in Dollar Tree Plus sections shift to $3, $5 and $7.

How many Dollar Tree stores are there?

Dollar Tree, a Fortune 200 Company, runs 16,774 stores in 48 states and five Canadian provinces as of Feb. 3, 2024. The stores are branded as Dollar Tree, Family Dollar, and Dollar Tree Canada.

Why is Dollar Tree raising prices to $7?

Why is Dollar Tree raising prices? Well, there are a few reasons. From transitioning Family Dollar-type items into “Dollar Tree Plus” stores — to hefty fines for rat-infested warehouses — to a rise in theft at the dollar store, we’ll explore and explain what’s going on with Dollar Tree.

In the recent earnings call, Dollar Tree’s CEO, Rick Dreiling, discussed its strategy to offer customers a broader product range through its “multi-price point strategy.” He noted that most new Dollar Tree customers in 2023 came from households making over $125,000 annually.

Dreiling mentioned plans to expand the multi-price assortment by introducing more than 300 items priced between $1.50 and $7 in 3,000 stores. This extended range will include higher-priced products like food, snacks, beverages, pet care, and personal care items while ensuring that the majority of Dollar Tree’s products remain priced at $1.

Moreover, Dollar Tree announced the closure of nearly 1,000 Family Dollar stores, accounting for 12% of their total store count. The reasons cited for this decision include increased theft at Family Dollar outlets. To address this issue, Dollar Tree has secured certain products and relocated others behind the registers. We also know that a huge fine due to a rat-infested warehouse has shaken up these dollar stores. In February, Family Dollar was fined over $41 million for admitting to maintaining unsanitary conditions for food, drugs, medical devices, and cosmetics at its distribution center in West Memphis, Arkansas.

According to Supermarket News, the company reported a net loss of $1.71 billion in the fourth quarter and a total net loss of $998.4 million for fiscal year 2023.

Six-Figure Earners Shop at Dollar Stores

With the rise in prices of groceries and household items, a growing number of high-income individuals are turning to discount retailers such as Dollar Tree, Aldi, and Five Below.

InMarket, a company that monitors retail foot traffic, reported a 4% average increase in visits to dollar stores last year by individuals earning over $100,000, compared to the latter half of 2022, as The Wall Street Journal stated. Surveys conducted by Morning Consult with approximately 50,000 Americans daily showed that households with six-figure incomes were 15% more inclined last year to consider shopping at dollar stores than in June 2022, increasing from 39% to 45%.

Reportedly, higher earners in the United States have traditionally considered discount stores as not catering to their needs, as mentioned by Michael Liersch, head of advice and planning at Wells Fargo, in a statement to The Wall Street Journal. However, this perception is changing. Liersch emphasized that the focus now is on maximizing financial resources and avoiding overpaying for goods.

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