- Dollar Tree customers say they will shop at Walmart and elsewhere as the store adds more expensive items.
- The retailer said in March that some items would cost up to $7.
- Despite some shoppers having higher incomes, many dollar store customers are still on a tight budget.
Dollar Tree is adding items with prices as high as $7, leading customers to wonder if shopping at a dollar store is still worth it.
Everything at Dollar Tree was one price for years – $1, then $1.25. That helped set it apart from Dollar General, which has sold merchandise at various price points for years.
Now, as Dollar Tree moves away from its traditional pricing strategy, customers are considering shopping elsewhere.
“If it really were to go up $7…that would be too much,” Scott Kolack, a shopper at a Dollar Tree store in West Palm Beach, Fla., told local television station WPTV. “I prefer to buy everything at Walmart.”
In the weeks following the $7 price announcement, some Dollar Tree customers commented on the company’s Instagram posts to express their displeasure.
“$7 store!! I’m not shopping with you anymore,” read one comment in a March 25 post.
“$1.25 was okay, but $7? ” another commenter wrote a few days later. “You might as well go to Five Below, Family Dollar, Dollar General. Don’t be surprised when business goes downhill.”
Dollar Tree did not immediately respond to a request for comment from Business Insider.
The higher prices don’t arrive immediately at all Dollar Tree stores. A selection of about 300 items, priced between $1.50 and $7, is being rolled out to 3,000 Dollar Tree locations, CEO Rick Dreiling said earlier this year. The company operates approximately 8,000 stores under the Dollar Tree brand, as well as a similar number using the Family Dollar name.
Last year, Dollar Tree began experimenting with prices up to $5. The most expensive products included items that the retailer’s executives said they were previously unable to offer, such as frozen waffles and coffee creamer.
Many shoppers flocked to dollar stores to save money as inflation drove up the prices of many consumer goods. Dollar Tree even said it noticed more customers who earned six-figure incomes stopping by its stores.
But many other, less wealthy Dollar Tree customers will likely be turned off by the higher prices, a Dollar Tree store manager in Minnesota — who worked for the company for a decade and a half before leaving — told BI in 2022. .
The manager recalled that many customers purchased fewer items after Dollar Tree’s 2021 decision to raise prices to $1.25.
“Your average sale should actually go up a little bit if they pay more,” the manager said. Instead, he saw “everyone at the registers counting and saying, ‘Oh, geez, I’m already at $5.’ That’s only four items.'”
“A quarter doesn’t sound like a lot, but when you talk to these people, it’s a lot,” he said.
Do you work at Dollar Tree, Family Dollar, Dollar General or another retailer and have a story idea to share? Contact this reporter at abitter@businessinsider.com
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