DISCUSSION
Will Dollar Tree succeed as a dollar+ store?
Written by George Anderson
Dollar Tree has decided that it can’t hold the line on its dollar pricing any longer. The retailer made known on Tuesday that it plans to raise prices on select items to $1.25 and $1.50.
Behind Dollar Tree’s decision are the rising cost of goods and customer demand for a wider selection of products. The retailer has expressed confidence in taking this pricing action after a test of dollar-plus price points in its new Combo and Dollar Tree Plus store formats.
“For decades, our customers have enjoyed the ‘thrill-of-the-hunt’ for value at one dollar — and we remain committed to that core proposition — but many are telling us that they also want a broader product assortment when they come to shop,” said Michael Witynski, Dollar Tree president and CEO. “We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs.”
The company is currently rolling out products above $1 across all of its Dollar Tree Plus units. Management plans to take it a bit slower at its legacy Dollar Tree stores and do further testing before taking the approach chainwide.
“We are a ‘test-and-learn’ organization which is what we are doing with this new initiative. We listen to our customers and believe it will make shopping with us an even better experience,” said Mr. Witynski. “Our merchants have proven that they are among the best in the industry in working with suppliers to create extreme value, and we will continue to deliver the ‘thrill-of-the-hunt’ to our customers.”
Dollar Tree said it expects to have 500 Plus stores in operation by the end of the calendar year. The locations offer an assortment of products at $1, $2 and $5 price points. Dollar Tree has plans to add another 1,500 Plus units in 2022, building to a total of at least 5,000 by the end of 2024.
The company also has big plans for its Combo units, which combine elements of the retailer’s legacy and Plus stores to offer products at a wider range of price points. Dollar Tree wants to add another 400 Combo locations next year to its current 105 units and reach a count of 3,000 in the years to come.
Dollar Tree operated 15,865 stores across the U.S. and Canada as of July 31.
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