Dollar Tree hiking prices as high as $7, but some Long Island customers say they'll stay loyal
The Dollar Tree at 5014 Jericho Tpke. in Commack. Credit: Barry Sloan
Dollar Tree’s plan to raise its prices to as much as $7 on some goods has caused anger among customers around the country but some Long Island shoppers said they'll remain loyal to the discounter.
Dollar Tree announced in March that it would be raising the prices of some food and other goods to as much as $7, following a previous price cap of $5 set in June.
In 2021, the retailer raised its starting price point on the majority of its merchandise to $1.25, the first time it exceeded $1 in its then-35-year history.
“They’ve become a different store. … it was going to happen eventually,” East Northport resident Bob Schnabel, 70, said Monday while standing in the parking lot outside the Dollar Tree in Commack.
Even with a price hike, Dollar Tree would still offer good value but it has to change with the times to stay competitive, said Schnabel, after buying candy and household goods at the store.
Dollar Tree plans to offer an expanded selection of food, beverages, pet care, personal care, and other items at more price points, the retailer’s chairman and CEO, Rick Dreiling, told analysts during a fiscal fourth-quarter 2023 earnings call March 13.
“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,” he said.
Most of the items the retailer carries still will be priced at $1.25, he said.
As of Feb. 3, Dollar Tree Inc. operated 16,774 stores in 48 states and five Canadian provinces — 8,415 were Dollar Tree stores and 8,359 were Family Dollar Stores.
There are 55 Dollar Tree stores on Long Island.
Chesapeake, Virginia-based Dollar Tree Inc. did not respond to Newsday’s requests for comment, including inquiries about which stores would be selling goods for $7.
Huntington resident Maria Karas, 59, who typically shops at Dollar Tree for holiday decor for her grandchildren, went to the Commack store looking for moon pies for the youngsters as a nod to the solar eclipse Monday.
“As long as they still have the $1.25 items [after the price hikes], I’ll still come here,” said Karas, who said the store’s goods are cheap enough that she doesn’t feel like she got ripped off “if they don’t hold up.”
Dollar Tree’s widened product assortment and prices already have attracted higher-income shoppers, Dreiling told analysts.
Of the 3.4 million new customers the retailer added last year, most were from households that earned more than $125,000 annually, he said.
Dollar Tree’s newest price hike will be a test to see if bringing in a higher-quality and more diverse product array will translate into more consumers, rather than squeezing shoppers, said Joe Feldman, senior managing director and retail analyst at Telsey Advisory Group, a brokerage firm in Manhattan.
“You’re already seeing it, right. I mean the past year or so, they’ve had in their cooler doors, $3, $4 and $5 items. You know, think frozen meals, frozen burger patties, frozen hot dogs, whatever. And, you know, that suddenly creates a whole new reason to come to the store,” he said.
It makes sense for Dollar Tree Inc. to focus more on its Dollar Tree chain since it is being dragged down by Family Dollar, a chain it bought in 2015 whose “core shoppers are not particularly loyal and tend to use it out of convenience more than anything else,” Neil Saunders, managing director of retail at Manhattan-based market research firm GlobalData, wrote in a note about Dollar Tree’s earnings in March.
Net sales at Dollar Tree stores open at least one year increased 6.3% in the fiscal fourth quarter that ended Feb. 3, while Family Dollar's declined by 1.2%.
Dollar Tree announced in March that it would close about 600 Family Dollar Stores in the first half of 2024 and approximately 370 more over the next several years as their leases expire.
“This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015. Basically, almost 10 years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around,” Saunders wrote.
Dollar Tree’s plan to raise its prices to as much as $7 on some goods has caused anger among customers around the country but some Long Island shoppers said they'll remain loyal to the discounter.
Dollar Tree announced in March that it would be raising the prices of some food and other goods to as much as $7, following a previous price cap of $5 set in June.
In 2021, the retailer raised its starting price point on the majority of its merchandise to $1.25, the first time it exceeded $1 in its then-35-year history.
“They’ve become a different store. … it was going to happen eventually,” East Northport resident Bob Schnabel, 70, said Monday while standing in the parking lot outside the Dollar Tree in Commack.
WHAT TO KNOW
- Dollar Tree plans to expand its assortment of products and raise some prices to as high as $7 at 3,000 stores this year, according to the retailer’s chairman and CEO, Rick Dreiling.
- Most of the items the retailer carries still will be priced at $1.25, he said.
- Dollar Tree's newer customers are from households that earned more than $125,000 annually, he said.
Even with a price hike, Dollar Tree would still offer good value but it has to change with the times to stay competitive, said Schnabel, after buying candy and household goods at the store.
Dollar Tree plans to offer an expanded selection of food, beverages, pet care, personal care, and other items at more price points, the retailer’s chairman and CEO, Rick Dreiling, told analysts during a fiscal fourth-quarter 2023 earnings call March 13.
“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,” he said.
Most of the items the retailer carries still will be priced at $1.25, he said.
As of Feb. 3, Dollar Tree Inc. operated 16,774 stores in 48 states and five Canadian provinces — 8,415 were Dollar Tree stores and 8,359 were Family Dollar Stores.
There are 55 Dollar Tree stores on Long Island.
Chesapeake, Virginia-based Dollar Tree Inc. did not respond to Newsday’s requests for comment, including inquiries about which stores would be selling goods for $7.
Huntington resident Maria Karas, 59, who typically shops at Dollar Tree for holiday decor for her grandchildren, went to the Commack store looking for moon pies for the youngsters as a nod to the solar eclipse Monday.
“As long as they still have the $1.25 items [after the price hikes], I’ll still come here,” said Karas, who said the store’s goods are cheap enough that she doesn’t feel like she got ripped off “if they don’t hold up.”
Attracting higher earners
Dollar Tree’s widened product assortment and prices already have attracted higher-income shoppers, Dreiling told analysts.
Of the 3.4 million new customers the retailer added last year, most were from households that earned more than $125,000 annually, he said.
Dollar Tree’s newest price hike will be a test to see if bringing in a higher-quality and more diverse product array will translate into more consumers, rather than squeezing shoppers, said Joe Feldman, senior managing director and retail analyst at Telsey Advisory Group, a brokerage firm in Manhattan.
“You’re already seeing it, right. I mean the past year or so, they’ve had in their cooler doors, $3, $4 and $5 items. You know, think frozen meals, frozen burger patties, frozen hot dogs, whatever. And, you know, that suddenly creates a whole new reason to come to the store,” he said.
It makes sense for Dollar Tree Inc. to focus more on its Dollar Tree chain since it is being dragged down by Family Dollar, a chain it bought in 2015 whose “core shoppers are not particularly loyal and tend to use it out of convenience more than anything else,” Neil Saunders, managing director of retail at Manhattan-based market research firm GlobalData, wrote in a note about Dollar Tree’s earnings in March.
Net sales at Dollar Tree stores open at least one year increased 6.3% in the fiscal fourth quarter that ended Feb. 3, while Family Dollar's declined by 1.2%.
Dollar Tree announced in March that it would close about 600 Family Dollar Stores in the first half of 2024 and approximately 370 more over the next several years as their leases expire.
“This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015. Basically, almost 10 years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around,” Saunders wrote.
Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.
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