Here’s Why $7 Goods Have Been Good Business for Dollar Tree | Global News Avenue

Get ready for the $7 era of Dollar Tree.

For years, a dollar wasn’t enough to shop at discount retailers, and Dollar Tree’s expansion beyond dollar stores into higher price points has proven profitable (DLTR), executives said last week. While most items sell for $1.25, shoppers can end up seeing items for about $7 in 3,000 stores.

The retailer, known for decades for its $1 price tags, said stores selling $5 and $7 items are outperforming traditional stores, supporting its efforts to convert more of its approximately 8,900 locations into The company’s plans for so-called Dollar Tree Plus stores. Interim CEO Michael Creedon Jr. said on an earnings call last week that customers at “Plus” stores come to the checkout with more items and return more often.

“The response from customers has been overwhelmingly positive,” Creedon said, according to a transcript provided by AlphaSense. “They really enjoyed the treasure hunt.”

Shoppers are looking for value. Retailers such as Walmart (WMT) have Fight for wealthy families As more and more Americans Search stores and the internet for the best deals. Dollar Tree, which owns the Family Dollar chain, said more middle- and upper-income earners are buying frozen meals and other foods as inflation has pushed up prices in recent years.

Creedon said the brand has also grown in market share among low-income households, who are increasingly purchasing needed items.

Creedon said Dollar Tree Plus stores are also selling slightly more discretionary items this fall compared with last year, despite the discount retailer citing inflation –Tired customers are cutting back on non-essential purchases.

Dollar Tree began moving away from its $1 price strategy in 2019, when the retailer launched Plus stores with a maximum price of $5, according to the company’s website. Executives said this spring that about 7,000 of the brand’s stores will become Plus stores by the end of the year.

The company is raising its base price from $1 to $1.25 in 2021 for the first time in more than three decades, and increasing more expensive items to $7, which Dollar Tree began selling earlier this year under the name Dollar Tree Plus 3.0. of stores use this price.