- Dollar Tree is adding products that cost well over $1.25 each.
- The company is trialling frozen and chilled groceries priced up to $5 in some stores, executives say.
- Rival Dollar General has been selling products at varying prices for years.
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Dollar Tree has a plan: Sell more items that cost well over a dollar.
The chain is testing new products in its grocery aisles, each costing up to $5, executives said at the company’s investor day last week. Initial sales results are encouraging and customers should expect to see more higher-priced products in Dollar Tree stores in the future, they said.
Last year, Dollar Tree made the remarkable decision to increase the price of its items from $1 to $1.25, citing inflation. Dollar Tree has held on to its single price longer than its main competitor, Dollar General, which has sold items at different price points for years.
While Dollar Tree’s price increase disappointed customers, sales continued to surge, paving the way for higher-priced items, executives said at an Investor Day event earlier this month.
“This is the gateway to the future,” Chief Merchandising Officer Richard McNeely said at the event. “We now have the platform to expand our range and price points.” McNeely called products priced between $2.01 and $5 a “huge market that is untapped for us.”
Frozen food is one area where Dollar Tree is experimenting, Chief Merchandising Officer Richard McNeely said at the event. The chain’s previous frozen range relied on “single serve innovations” such as individually wrapped cheeseburgers and ice cream bars.
But in some stores, Dollar Tree’s freezer departments are already offering “meal solutions” like boxes of fish fingers and Eggo waffles priced at $3, $4, and $5, McNeely said. At some point, the company plans to stock most of its freezer section with higher-priced items, according to a copy of the Investor Day presentation the company posted on its website.
A slide from Dollar Tree’s investor presentation shows the retailer’s plans to expand its range of higher-priced frozen food items.
money tree
In May, Dollar Tree added coolers of juice, creamer, Velveeta and other refrigerated products at 140 stores. Everything in the coolers costs $3, according to the presentation. Some stores also sell loaves of bread for $3.
Higher-priced products could also make their way into other parts of the Dollar Tree business. The presentation highlighted products like Christmas trees, Hot Wheels playsets, and Airpod knockoffs as examples of what Dollar Tree hasn’t been able to sell yet, priced at $1.25, but could in the future.
The number of dollar stores in the US has exploded in the last decade.
Dollar Tree has about 16,000 locations and Dollar General has nearly 20,000. Dollar General recently opened its first store in Mexico. And it’s expanding into new products and services, too, well beyond cheap toys and home goods, from financial services to fresh produce to basic health care.
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https://www.businessinsider.com/dollar-tree-is-adding-products-cost-5-each-2023-6
