Dollar Tree Raises Price Cap To $7 Due To High-Earning Shoppers

Dollar Tree has announced a increased price cap of $7, thanks to an influx of more affluent customers.

Dollar Tree may start to feel less like a bargain soon.

The discount store announced a price cap hike to $7, due to the influx of higher income customers during its fourth quarter earnings call in early March, according to USA Today. The company intends to raise its price range for food, pet, and personal care items.

“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,” explained CEO Rick Dreiling on the call.

This raise comes after the store set a $5 cap in June, as reported byYahoo Finance. While the company originally started costs for products at $1, it has since increased to a new base price of $1.25. However, price-points do range based on quality and content.

Dreiling added, “Over time, you will also see us fully integrate multi-price merchandise more into our stores so our shoppers will find $5 bags of dog food next to our traditional $1.25 pet treats and toys, and our $3 bags of candy will be found in the candy aisle.”

Their reasoning for the sudden shift stems from higher income earners becoming regular customers at their stores. Dreiling referenced how the fastest-growing demographic for their customers earn over $125,000 annually. According to the Wall Street Journal, affluent shoppers still shop at the dollar store for bargains, even as inflation cools.

However, the prices for everyday goods remain higher than recent years. Consumers are adopting new spending habits due to unyielding costs at the grocery store. The trend for everyone to shop for the most affordable price has now trickled down to Dollar Tree.

The news also comes as the company recently announced mass store closures of its Family Dollar brand—nearly 600 locations in 2024. Dollar Tree locations will close as well as their leases expire over the next few years.