Dollar Tree, as its name suggests, has long been known for its low prices. However, the store recently increased its maximum price to a whopping $7, up from $5 in 2023.
While $7 may not seem like a lot of money, it is certainly a high cost for a “dollar store.” In fact, just a few years ago in 2021, Dollar Tree also raised its base price to just $1.25.
The new price increase will affect more than 300 items, specifically food, pet supplies and personal care. Additionally, the bargain retailer announced that they are preparing to close about 600 Family Dollar locations.
Many consumers shared their disbelief and frustrations on X (formerly Twitter), with comments like “It looks like Dollar Tree is feeling fancy about its new $7 price limit. It’s time to treat myself to the fanciest item in the store: maybe a whole pack of gum.”
Another user said“If they hadn’t opened so many stores and closed them due to failure, they could have kept prices where they were.”
Why Dollar Tree Increased Its Maximum Price
CEO Rick Dreiling shared his reasoning for the price increase on an earnings call: “This year, in 3,000 stores, we expect to expand our multi-price assortment by more than 300 items priced between $1.50 and $7,” he said.
“But even as our multi-price assortment expands over time, the vast majority of items sold in Dollar Tree stores will remain at our entry-level fixed price.”
Dreiling noted that the company’s “fastest-growing demographic” earns an annual salary that is “above $125,000.”
This choice is expected to help the store offer more products to shoppers instead of taking away their current ones or making them less affordable.
“Over time, you’ll also see us integrate more multi-priced products into our stores, so our shoppers will find $5 bags of dog food alongside our traditional $1.25 pet treats and toys, and our $1.25 bags of candy. for $3 they will be found in the candy aisle,” Dreiling continued.
“This is the next exciting chapter in Dollar Tree’s value story: new items, more options and more savings.”
According to Dreiling (and despite the negative reaction seen at X), this has been a successful change for the company.
“Dollar Tree’s multiple pricing strategy is working significantly better than we thought,” he said. “To be honest, customer acceptance has been off the charts.”
However, there have been some challenges for the brand. “Our biggest problem right now is getting enough merchandise into stores quickly enough for the consumer to respond.”
Categories: Biography
Source: vcmp.edu.vn