Looking at the Dollar Tree locations many are near a grocery store, or a Wal Mart, or something else selling many consumables. These stores sometimes but usually do not operate on islands (like a lot of Dollar Generals and Family Dollars do). Dollar Tree is basically a redundant store, understaffed often with only one checkout and a long slow line due to a terrible POS system (self checkouts would sure help this store out), and the only reason you go there for consumables is to get a better deal. If it isn't a better deal, there is no reason to go there. Just buy the items at the grocery store or wherever else you were already going to stop.buckguy wrote: ↑January 2nd, 2022, 6:55 am This probably won't be their last trip to the rodeo for changing prices. They're likely chasing inflation on some items and searching for higher margins on others. The question is where they reach a point where they have more competition from other stores (and other kinds of stores) and where the value of what they sell gets lost. They also may need to spend more on promotions as the items get more expensive esp. if they get into items that have more of a "season" and need periodic clearances. They probably won't lose the occasional shoppers who go there because it's quick and easy and there isn't much else around that's worth the effort, but they really need to know their regular customers to figure out how far they can take this.
There is a real simplicity to the operation of Dollar Tree because almost every item is a single price point (or some items may be a 2 for $1 price point). There is no price change activity required by staff, there are no arguments with regard to prices scanning wrong/misplaced items, and theft is typically not much of a concern due to the low value of the items. Items are shipped to the store based on allocation from the system, the stores don't do any ordering or anything along those lines (unless a customer wants a quantity of items then the store can special order). They can keep all of this simplicity as long as they keep a single price point. But the issue as Bagels is pointing out is many items are not competitive anymore at 1.25. So what do you do? Do you have some items $1 and some items $1.25? Do you start running sales/promotions putting some items back at $1 for a limited time? All of this screws up the simple operation.