Dollar Tree said that it’s raising its price cap to $7 because it sees an influx of shoppers making upwards of $125,000 a yr, based on the discount giant’s CEO.
“This yr, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points starting from $1.50 to $7,” Dollar Tree chief Rick Dreiling said through the company’s fourth-quarter earnings call earlier this month.
The move comes three years after the corporate raised the bottom price of its items to $1.25 — and just months after Dollar Tree set a $5 cap in June, based on USA Today.
Dollar Tree announced that it’s going to now cap prices for some items at $7 only months after it set a $5 price cap in June. AP
Items closer to the $7 threshold will include food and snacks, in addition to pet and private care products.
Dollar Tree raised its price cap after seeing that more high-earning shoppers were visiting its 16,700-plus stores across the US as inflation rages.
“Dollar Tree added 3.4 million latest customers in 2023, mostly from households earning over $125,000 a yr,” Dreiling said through the earnings call.
“The fastest-growing demographic is north of $125,000 a yr in income,” he added. “It’s not just like the Northeast is robust and the West is weak. That boat is lifting pretty even all the best way up.”
Still, Dollar Tree reported a net lack of $1.71 billion, or $7.85 per share within the quarter ended Feb. 3, compared with a year-ago profit of $452.2 million, or $2.04 per share.
It expects 2024 sales between $31 billion and $32 billion, the mid-point of which is below the estimate of $31.65 billion, based on LSEG data.
“Dollar Tree added 3.4 million latest customers in 2023, mostly from households earning over $125,000 a yr,” the discount giant’s CEO Rick Dreiling said through the company’s earnings call earlier this month. Dollar Tree, Inc.
Within the wake of the losses, Dollar Tree announced plans to shut nearly 1,000 stores collectively between its namesake general discount stores and subsidiary chain, Family Dollar.
Family Dollar will close 600 locations in the primary half of 2024 and 370 stores over the subsequent several years as store leases expire, the corporate said Wednesday.
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Dollar Tree, which bought Family Dollar for $8.5 billion in 2015, can even be closing 30 stores as leases expire.
Dollar stores have suffered in recent months as consumer spending habits have shifted, favoring e-commerce platforms resembling Temu, the Chinese app that has ballooned in popularity for offering on a regular basis must-haves on the app for as little as 99 cents.
Dollar Tree announced plans to shut nearly 1,000 stores collectively between its namesake general discount stores and subsidiary chain, Family Dollar. CJ GUNTHER/EPA-EFE/Shutterstock
In November, Dollar Tee — which operates greater than 8,400 Family Dollar locations — had said it might be reviewing its Family Dollar business, including potentially shutting down underperforming stores, to return to growth.
After deciding on nearly 1,000 store closures, the corporate said it took a $594.4 million charge for a portfolio optimization review and incurred a goodwill impairment charge of $1.07 billion, in addition to $950 million in other asset impairment charges within the reported quarter.
Representatives for Dollar Tree didn’t immediately reply to The Post’s request for comment.
