Why Dollar Tree Is Dropping Many of Its Prices Back to $1
Dollar Tree is finally rolling back some of its previous price increases, reaffirming its name once again.
The discount retailer recently tested out new pricing structures, increasing the base price of products from $1 to $1.25 and adding others at $2, $3 and $5, as reported by GOBankingRates.
Expanding food and beverage prices up to $5 helped the store "better serve" more rural market, where many of its consumers do the bulk of their grocery shopping at dollar stores, according to the publication. With the increased prices, Dollar Tree was able to stock more name brands and other popular options, allowing the store—and stores like it—to become the fastest-growing grocers. Still, they only hold about a single percent of the market share in comparison to big-box chains like Walmart or wholesalers like Costco.
Plus, as Dollar Tree CEO Rick Dreiling reportedly told an investors’ conference earlier his summer, “It’s pretty hard to have a banner like (Dollar Tree), and you have an item that everybody else has at $1, and you’re at a buck and a quarter.”
Coupons in the News reports that 300-400 items are estimated to be affected by the upcoming rollback, making up about five percent of the store's inventory. Dreiling believes that the brand will be able to introduce more items at new prices, too, but assured investors that prices would remain limited and fixed.
Dreiling also reportedly plans to modernize many of the company's stores—Dollar Tree and Family Dollar—which he admitted are "right out of 1975.”
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