"Dollar Tree is seeing benefits from branching out into products that cost over $1.25 each. The dollar store chain has spent the last couple of years adding items that cost more than its standard $1.25 price point. Dollar Tree has added items that cost $3 and $5 each, for instance, and experimented with items that cost as much as $7. The strategy is paying off, executives said on Dollar Tree's latest earnings call on Wednesday, especially when it comes to serving new customers."
""Expanding our assortment to include items at a variety of price points is fast becoming the standard Dollar Tree model," CEO Michael Creedon said on the call. He said the chain's wider range of prices lets it sell larger packs of some consumable goods and higher-quality items. That wider range of products particularly appeals to shoppers from households with incomes of at least $100,000 annually."
"Dollar Tree largely beat analysts' expectations for the period, including with 6.5% growth in same-store net sales. More affluent customers are coming to Dollar Tree stores for the 'thrill of the hunt,' Creedon said. "You come into Dollar Tree, you're not exactly sure what you needed, and by the end of the first aisle, there's a basket there because you got more than you thought you would," the CEO said. "That's the Dollar Tree magic.""
Dollar Tree expanded its assortment beyond the traditional $1.25 price point, adding items at $3, $5 and up to $7. The broader pricing mix allows the chain to offer larger multipacks and higher-quality items while retaining lower-priced options. Higher-income households (at least $100,000 annually) contributed a meaningful portion of second-quarter sales growth. Same-store net sales increased 6.5% in the quarter, and results largely beat analyst expectations. Multiple price points are becoming the standard Dollar Tree model and are helping attract new and more affluent shoppers, increase basket size, and boost overall sales momentum.
Read at Business Insider
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