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Dollar Tree Is Raising Its Price Cap to $7: 'The Macro Environment Has Gotten in Our Way' The discount chain's cap was most recently raised to $5 last June.

By Emily Rella

entrepreneur daily

Discount chain Dollar Tree is raising its price cap to $7 in stores nationwide as inflation continues to affect shoppers across the globe.

"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," said CEO Rick Dreiling on a company earnings call. "This expanded assortment will offer Dollar Tree shoppers a wider range of choices across a variety of categories, including food and snacks, beverages, pet care, personal care, and more."

The cap originally shifted from $1 to $1.25 in 2021 before bumping to $5 this past June.

Related: Dollar Tree Is Closing 1,000 Family Dollar Stores

Dreiling explained that though some items on shelves might be priced at the higher end of the spectrum, the "vast majority" would remain priced at the chain's "entry-level fixed price point," which is $1.25.

In the same Q4 2023 earnings call earlier this month, Dreiling noted that inflation and reduced benefits from the government have affected the chain's lower-income customer base and that the company's "fastest-growing demographic" of shoppers are making $125,000 or more a year.

"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," he said. "This is the next exciting chapter of the Dollar Tree value story: new items, more choices, and more savings."

Eventually, the chain wants to get to a $10 price cap but is focusing on ending with a net positive 2024 before upping the price cap again.

"We're continuing to march toward that goal. However, the macro environment has gotten in our way, and we are dealing with high, high shrink numbers. We're dealing with big mix shifts," Dreiling told investors.

Dollar Tree, which owns Family Dollar, announced this month that it would be shuttering 1,000 Family Dollar locations over the next few years, 600 of which are expected to shutter in the first half of fiscal 2024.

Related: Dollar Tree Announced Price Increases and People are Losing it: 'This is Really the End of Times I Fear'

In February 2024, a plea agreement with the FDA cost the company $41.6 million after it was found that the chain was storing items in an unsafe manner in one of its major warehouses. In 2023, the company settled a class action for $1.35 million from employees claiming they worked in hazardous conditions.

Dollar Tree was down over 5.85% year over year as of Wednesday morning.

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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