 Dollar Tree sees shift in consumer behavior |
Source |
American Shipper |
Post Date |
11/19/2025 |
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Consumers are under pressure, and one retailer is taking note.
Key Points
?Dollar Tree now offers $3, $5, and $7 items, expanding beyond traditional $1 pricing.
?Higher-income shoppers frequent Dollar Tree more, doubling since 2021, reflecting inflation-driven habits.
?CEO notes ?asket has five more units?early double the value of a traditional Dollar Tree basket.?
There? something comforting about walking into Dollar Tree.
Even though the days of things actually costing $1 are far behind us, the typical Dollar Tree purchase costs $1.25 to $1.50. That? a far more pala price point than what you might find at your local supermarket or Walmart.
But the reality is that Dollar Tree isn? shy about promoting products whose price point well exceeds the $1 mark.
Over the past year in particular, Dollar Tree has expanded its assortment of $3, $5, and even $7 items.
There? a reason for that, and it points to a bigger consumer tr.
Dollar Tree isn? afraid of more expensive inventory
When Dollar Tree first announced that it was shifting its base price point from $1 to $1.25, there was a world of backlash from customers.
But at this point, it seems as though Dollar Tree shoppers have accepted the store? higher prices. After all, just about every retailer is ging more these days for essentials and splurges alike. And there are still discounts to be had at Dollar Tree ?they?e just a bit more money.
But the reason Dollar Tree isn? scared to increase its price point isn? just that everyone else is doing it. It? that higher-income households are increasingly showing a willingness to sp their money at Dollar Tree.
That? something it pays for the company to capitalize on.
More than 10% of consumers earning $100,000 or more shop at Dollar Tree today, according to CBS News, citing findings from GlobalData Retail. By comparison, in 2021, only 5.6% of consumers with $100,000+ paychecks did the same.
?here has been an increase in the distribution of visits to Dollar Tree by middle and upper-middle-income families in 2025 compared to the past few years,?said Elizabeth Lafontaine, Director of Research at Placer.ai.
?his could indicate potential trade down by consumers into the dollar store category and also Dollar Tree? expanded presence in suburban communities and assortment diversification.?
A big shift in consumer behavior
Four years ago, Dollar Tree would not have been able to boldly display $5 and $7 items and get away with it. Today? economy is very different. And the fact that Dollar Tree can forge forward with higher-priced items is a clear indication that consumers are feeling the strain of inflation and tariffs and adjusting their sping habits accordingly.
During the company? last earnings call, Dollar Tree CEO Michael Creedon said, ?he customer response has been incredibly positive to multi-price. If you look, the basket has five more units in it. It? nearly double the value of a traditional Dollar Tree basket.?
That may be good news for Dollar Tree. But it could be incredibly bad news for traditional retailers who stand to lose customers as inflation and tariffs continue to wreak havoc on household budgets.
The fact of the matter is that the more higher-income shoppers who are willing to sp their money at Dollar Tree, the less business big-box retailers like Target are apt to capture. That could dramatically change the retail landscape in the coming years, especially if persistent inflation doesn? let up.
Of course, Dollar Tree will also need to tread carefully given this shift in consumer behavior.
?he retailer has an opportunity to push its assortment and pricing strategy to align with its new demographic of visitors,?said Lafontaine. ?ut it? also important to keep the core promise of value at the center of its strategy, as most consumers are seeking more value and lower prices.?
The last thing Dollar Tree wants is to alienate its core customers in an effort to attract higher-income shoppers. But if it strikes the right balance, the company has a chance to really shine at a time when just about everyone is looking for a bargain.
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