Dollar Tree stores have long been a great place to shop, particularly for low income families, for just about anything. However, it seems with the cost of living crisis squeezing us all, now the chain store has been forced to take action.
Dollar Tree hasn’t been having the greatest time as of late; the last year or so has really been a test for the company. Earlier this month Family Dollar, a subsidiary of Dollar Tree, was forced to close down hundreds of stores thanks to a number of issues the company is facing. To be honest the future honestly isn’t looking all too bright either so the discount variety store is going to have to take action and switch things up a bit if it wants to keep ahead.
Is Dollar Tree raising prices?
One of the measures taken to try and generate a bit more revenue has been to raise the prices. According to an article from People, Dollar Tree is raising its price cap to $7, which is up from the previous cap of $5. The CEO, Rick Dreiling, stated earlier this month that the company would “expand [the] multi-price assortment by over 300 items” meaning customers can expect to see an increase in price when it comes to their shopping lists. The new price cap will come into effect in over 3000 stores nationwide, whilst thousands more stores will see $3 and $5 merchandise being made available.
Will this benefit Dollar Tree?
You’d think raising prices would alienate the customer base as Dollar Tree has primarily marketed towards lower income families and those are the kind of demographics that would typically shop there. Raising prices will make it harder for those already struggling so it’s risky, as the company could lose customers to stores like Dollar General which is a generally cheaper alternative.
However, The Wall Street Journal reports that there has been an increase in higher income consumers shopping a dollar stores, so this decision to raise prices might just save Dollar Tree. Although the same can’t be said for the lower income individuals who have been priced out. Understandably, people are a bit miffed at the apparent greed in this decision, taking their grievances over to X (formerly Twitter) to make their complaints heard.
Why is Dollar Tree increasing prices?
Aside from the cost of living crisis, the company has had a decent amount of trouble thanks to Family Dollar, the company acquired Family Dollar in 2015, but the discount stores haven’t been doing so well. A hefty fine from the FDA and a dwindling customer base has led to over 1000 stores being shut down. Whilst the company doesn’t seem to be in real dire straits, it could be that Dollar Tree is hoping to recoup some of its losses by appealing to a new demographic.
