Dollar Tree might have to start considering a rebrand as it continues to branch out into higher price points. The retailer will begin adding new price points above $1 at all Dollar Tree Plus stores, and will start testing doing the same at legacy Dollar Tree stores.
“For decades, our customers have enjoyed the ‘thrill-of-the-hunt’ for value at $1 — and we remain committed to that core proposition — but many are telling us that they also want a broader product assortment when they come to shop,” said Michael Witynski, President and CEO of Dollar Tree in a statement. “We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs.”
Another probable motive: heading off the impact of ballooning inflation, which hit a 30-year high in July at 4.2%. Members of the Fed’s rate-setting committee expect that to hold through the end of year, but begin to cool in 2022.
The company said it will have 500 Dollar Tree Plus stores — which offer an assortment of $1, $3 and $5 products — open by the end of 2021, with plans to add another 1,500 in fiscal 2022. The goal is to reach 5,000 stores by 2024.
The company also plans to expand it combo store format, which brings together the Dollar Tree and Family Dollar brands in one storefront, primarily in smaller towns and rural communities. Dollar Tree acquired Family Dollar in 2015 and opened the first combo store in 2019. There are currently 105 combo stores in operation, with 400 more to be added in 2022 and the potential for up to 3,000 over the next several years.
“We are a test-and-learn organization, which is what we are doing with this new initiative,” added Witynski. “Our brand promise is that customers get great value for what they spend at Dollar Tree. We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1, $1.25 or $1.50.”