Dollar Tree Raising Prices

Alpha8472
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Re: Dollar Tree Raising Prices

Post by Alpha8472 »

Everything at my local store is now $1.25. It is an awful deal on many items now. Customer traffic is much lower now.
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Re: Dollar Tree Raising Prices

Post by storewanderer »

Alpha8472 wrote: December 7th, 2021, 4:34 pm Everything at my local store is now $1.25. It is an awful deal on many items now. Customer traffic is much lower now.
They say all locations to $1.25 by April 2022. Some stores have exterior signs (lit signs) that say everything's $1.00. It won't be that hard to call a sign crew out to change that and I guess if they were in a real hurry they could just cover that up with a banner, but that is still more effort than just doing sign changes inside the store. So I am expecting those locations to change prices last.

However without some changes to product mix I think this will backfire as many items are not worth the $1.25 and were value engineered specifically for the $1 price point.

So far the 3 locations I have seen price change to $1.10 are all in Douglas County, Nevada- one is on Topsy Lane in Carson City, one is in Minden (surprised this one stays open), and the other is in Zephyr Cove, NV (Lake Tahoe).
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Re: Dollar Tree Raising Prices

Post by buckguy »

Changing to merchandise mix might not work so well for them. I stumbled onto a thesis that was written about the increases in prices and eventual end of caps by variety chains. The upshot was that raising prices increased sales but decreased profit margins, because they got into merchandise where they had more competition. Some variety chains like Grants and Kress had started with higher price points (they were 25 cent stores, not dime stores) and some chains had strategies that insulated them from competition (GC Murphy took over a lot of company stores in little coal towns), but they were not immune from this. Grant went heavily into apparel which has higher margins but requires smarter buying and the need for periodic clearances, unlike dishes, cheap toys, stationary, etc. The chains that suffered most were Kresge which set up a second chain (green front stores instead of red) for higher priced goods and McCrory which went bankrupt.

It made me wonder when the dollar stores would reach the point where they couldn't be dollar stores anymore and what would happen. The long downward push on labor costs seems to be ending and now is defeating itself. These chains seem to finally reaching saturation and Dollar Tree often trades in more expensive locations than the others which means higher costs for them. The Five Below strategy seems more viable in those places and has more room to merchandise, as long as they are careful in their choices. The move of other chains into food may work in true food deserts but probably not where there are Aldis or decent Savalot operators. The variety chains eventually morphed into "junior department stores" although they kept the goldfish, spools of thread and other cheap stuff. They went to self-service when labor costs increased and the move to the suburbs didn't always work well for them---it required huge investments and discount chains emerged as competitors, along with mass merchandisers like Penneys and cheap clothing chains (if which there were many). Dollar stores' big advantage over Walmart or a big super is that you're in and out and they sell stuff you don't care is off brand. That won't work when they have to sell a broader range of items or creep closer to price points at other kinds of stores.
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Re: Dollar Tree Raising Prices

Post by Super S »

Some people will likely accept this as part of inflation that is occurring. But still, I have to wonder if we will see a point where they move away from everything being one price. Newer locations have downplayed this significantly. They will likely have to shift some of the merchandise mix as this occurs.
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Re: Dollar Tree Raising Prices

Post by Romr123 »

I just had a wander through a Dollar Tree in a dingy strip center across from a new Kroger Marketplace. Surprisingly pleasant experience--clean and reasonably tidy. Bought two pair of boot socks, a pizza crust, and some Hallmark sympathy cards.
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Re: Dollar Tree Raising Prices

Post by Alpha8472 »

Dollar Tree is very inconsistent. One store may be tidy, but another may look like a hurricane hit it. The ones I see in poorer neighborhoods look like a mess. They always have about 3 employees walking around doing anything but tidying up. I do not know what they are doing, but they are obviously not using their time wisely. They are not opening up checkstands when lines are long and they walk right past junk spilled all over the floor. I know that there is a labor shortage, but the quality of employees has really gone down hill.
Last edited by Alpha8472 on December 9th, 2021, 4:15 am, edited 1 time in total.
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Re: Dollar Tree Raising Prices

Post by storewanderer »

Saw a location tonight that removed the lit "Everything's $1.00" sign from the exterior completely.

Was still $1 inside if you could find anything on the shelves worth buying. Cannot believe employees are not embarrassed at even operating a store in this condition.

I guess all efforts are on removing the "everything's $1" signs in the store. So far they still have wall fixtures but have torn off all of the plastic shelf strips which I am guessing took a lot of time.
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Re: Dollar Tree Raising Prices

Post by HCal »

Super S wrote: December 8th, 2021, 9:59 am Some people will likely accept this as part of inflation that is occurring. But still, I have to wonder if we will see a point where they move away from everything being one price. Newer locations have downplayed this significantly. They will likely have to shift some of the merchandise mix as this occurs.
I think they simply won't have a choice at some point. Even 99 Cents Only has abandoned their single price point, although less dramatically. With inflation, price swings, and shortages, having everything for the same price doesn't seem workable for much longer.

I'm guessing that Dollar Tree will become very similar to Family Dollar over the next several years.
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Re: Dollar Tree Raising Prices

Post by jamcool »

In fact there are now Dollar Tree/Family Dollar combo units
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Re: Dollar Tree Raising Prices

Post by BillyGr »

jamcool wrote: December 9th, 2021, 7:22 am In fact there are now Dollar Tree/Family Dollar combo units
Those seemed to be a sensible way to go. That way, you can still have sections focused on the $1 (or whatever) price level (given that even a stand alone Family Dollar still has some items for that price), and then other sections with more varied prices to offer items that simply can't be profitable at $1.
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