Dollar Tree is not just for $1 bills anymore. For some time, some store items have crept up closer to $1.25, but now the company is not stopping there.
At its investor meeting last week, talk from Dollar Tree executives centered around Dollar Tree Plus, which includes products that cost between $3-$5, and which the company says make up its biggest opportunity to drive sales.
Stores have been prepping for the move over the last few months with the installation of larger freezer and refrigerated sections. Expansions with those stores are continuing, reports Yahoo Finance, with Dollar Tree expecting to introduce combo stores (existing brick-and-mortar that sell products ranging from $1.25 all the way up to $5) while also having purer Dollar Tree Plus rollouts.
The company projects close to 3,000 Dollar Tree Plus locations by the end of the first quarter, with another 1,350 stores in the works for the remainder of 2023.
Since prices first began to jump to $1.25 vs. $1, Dollar Tree has been experiencing some of its best sales numbers in history. In the fourth quarter, which ended Jan. 28, same-store sales increased 8.7% year-over-year and the average ticket went up 10% even though traffic was down 1.1%. Operating profit was up almost 50% to $2.5 billion.
Dollar Tree CEO Rick Dreiling said part of those sales can be attributed to an aggressive strategy around frozen and refrigerated foods — a selection which includes eggs, meat, and fish as well as pizza and ice cream, according to reporting from Business Insider.
Dreiling also said customers also have been responding positively to the move, and that when they do buy the higher-priced items, they usually spend more than twice as much as the average Dollar Tree shopper.
The company is now attracting the shoppers they were losing in the past. Dollar Tree’s proprietary data provider tracked millions of transactions at stores and found shoppers were spending 90% of their wallet at other stores with the average unit retail of $3.93.
