Dollar Tree Inc. announced on September 28 that it would begin offering higher-value items at all combo stores and implemented the Dollar Tree Plus section at all locations in the United States as part of its multi-value development.
The company will begin offering price points above its signature $1 and offer an assortment of items priced at $1, $3, and $5, according to a . Company news release.
The company began testing higher prices at several hundred of its approximately 8,000 locations in a portion of the store called Dollar Tree Plus. Items that can go for $1.25 to $1.50 will soon be found in the mix in some places among the typical assortment of $1 products.
Dollar Tree Inc. currently has 105 combo stores and expects to add 400 more in 2022. The company plans to add $1,500 tree plus sections in 2022 and upwards of 5,000 in 2024.
FILE – Dollar Tree, Discount Variety Storefront.
The combo store format, which was introduced in March, combined the Dollar Tree and Family Dollar brands under one roof.
“For decades, our customers have enjoyed ‘thrill-of-the-hunt’ for the value of a dollar – and we remain committed to that core proposition – but many are telling us that when they come Also want a broader product assortment. Shop. We believe that testing additional price points above $1 for Dollar Tree products will allow us to expand our assortment over time, introduce new products, and more Will enable us to meet the everyday needs of customers,” said Michael Wittensky, President and Chief Executive Officer.
In August Wittensky told analysts that Dollar Tree Plus stores saw sales growth of about 6%, while larger combo stores delivered 23% more sales.
The move comes as Dollar Tree recently lowered its full-year profit outlook, citing higher supply chain and freight costs.
The company now projects that its regular ocean carriers will meet only 60% to 65% of their commitments, down from previous guidance of about 85%. It cited a more than 20% increase in spot market rates for sea freight from China since its first-quarter earnings report in May.
Dollar Tree said it now expects an additional $185 million to $200 million in freight costs, or 60 to 65 cents per diluted share, from May’s guidance. For fiscal year 2021, Dollar Tree forecasts net sales of $26.19 billion to $26.44 billion and diluted earnings per share in the range of $5.40 to $5.60.
“We are a ‘testing and learning’ organization that we are into with this new initiative. We listen to our customers and believe it will make shopping with us an even better experience.”
The Associated Press and Granthshala Business contributed to this report.