Dollar Tree is Raising Their Prices Up to $7 (Here's What We Know) (2024)

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Dollar Tree is Raising Their Prices Up to $7 (Here's What We Know)? ›

The store plans to continue expanding these choices for customers in more areas and increase the price ceiling to $7 by the end of 2024. “This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” the CEO stated.

In the company's most recent earnings call, executive chairman and CEO Rick Dreiling said the increase was part of Dollar Tree's “multi-price point strategy” to offer shoppers a more “relevant assortment,” Business Insider reported.

Dollar Tree sees traffic from higher-income consumers

Dollar Tree executives said that the demographics of their customers trended towards higher income brackets, according to USA TODAY. "The fastest-growing demographic is north of $125,000 a year in income," Dreiling said of a trend the company sees nationwide.

Dollar Tree is yet again not sticking to the dollar theme in its name. The company announced last month that it would be increasing the prices on items again. The official prices announced were a minimum of $1.50.

Dreiling discussed More Choices, the company's multi-price strategy. This strategy calls for expanding the company's multi-price assortment by over 300 items at prices above $1.25 in roughly 3,000 Dollar Tree stores by the end of the year. "Multi-price has never been about raising prices on existing items," he said.

In response to the dismal quarter, Dollar Tree said it will close roughly 600 Family Dollar stores in the first half of fiscal 2024, and about 370 Family Dollar and 30 Dollar Tree stores over the next several years as their leases expire.

In 2021, Dollar Tree caused an uproar when it raised its standard price from $1, as the store name implies, to $1.25. The retail giant then rolled back its prices to $1 in 2023, a move that coincided with cooling inflation.

For fiscal 2023, the company lost $998 million, versus a profit of $1.6 billion in 2022. The key reason for its loss is a $594.4 million charge for portfolio review, a $1.07 billion goodwill impairment charge, and a $950 million trade name impairment charge.

Of the 226 consumer and food products tested at Dollar Tree, Family Dollar, Dollar General, 99 Cents Only, and Five Below, 53% of the products screened in 2021 contained one or more chemicals of concern. All of the products tested were purchased in 2021.

Dollar Tree has already announced that it is on track in 2021 to have 500 Dollar Tree Plus stores by fiscal year-end – offering an assortment of value priced $1, $3, and $5 products. Another 1,500 stores are planned for fiscal 2022, and at least 5,000 Dollar Tree Plus stores are expected by the end of fiscal 2024.

Who owns Dollar Tree? ›

Dollar Tree is owned by Dollar Tree, Inc. Rick Dreiling has served as the CEO of the company since January 2023 and has held the role of Executive Chairman on the Board of Directors since March 2022.

DLTR Stock 12 Month Forecast

Based on 20 Wall Street analysts offering 12 month price targets for Dollar Tree in the last 3 months. The average price target is $139.61 with a high forecast of $170.00 and a low forecast of $115.00. The average price target represents a 30.81% change from the last price of $106.73.

In a significant departure from its traditional pricing model, Dollar Tree has announced plans to raise prices on select products from $1.25 up to $7. This decision reflects the retailer's response to mounting cost pressures and supply chain disruptions.

According to Yahoo Finance, a $5 price cap was announced in June 2023. The base price had also been raised to $1.25 in 2021. According to Dreiling, the move was made in order to add new products to their shelves.

Consolidated net sales increased 4.2% to $7.63 billion. Enterprise same-store net sales increased 1.0%, driven by a 2.1% increase in traffic, offset by a 1.1% decrease in average ticket. Dollar Tree same-store net sales increased 1.7%, driven by a 2.8% increase in traffic, offset by a 1.1% decrease in average ticket.

When demand for the dollar increases then so does its value. Conversely, if the demand decreases, so does the value. The demand for the dollar increases when international parties, such as foreign citizens, foreign central banks, or foreign financial institutions demand more dollars.

Purchase Cost

Dollar stores buy a lot of inventory at a time so they can sell things cheaply. Much of the inventory dollar stores purchase cost less than a $1 because they're damaged. But it's buyer beware with items like toys, which can break easily at times.