As dollar stores experiment with new formats and fresh product lineups, they’re also exploring higher price points that would allow them to offer more variety, but still at a price that beats the competition.
Dollar Tree began piloting a new format in 280 stores in 5 states in spring 2021, with price points of $1, $3, and $5, called Dollar Tree Plus!
The stores carry a merchandise mix similar to Family Dollar. The revamped format was expected to reach 500 locations by the end of last year, with fresh produce being part of the assortment.
Dollar Tree is also expanding its combination Family Dollar-Dollar Tree stores. The hybrid locations, which began opening in 2019, are centered in towns the company considers too small for a larger, traditional Dollar Tree.
The mix of the two adds Dollar Tree’s low, fixed price point, giving customers what the company calls “the thrill of the hunt,” to the everyday value positioning of Family Dollar, which is already located in small markets.
The combined stores have been seeing a sales lift of 20 percent compared to Family Dollar alone.
Perhaps the biggest news late last year was Dollar Tree’s announced price adjustment after 35 years—raising all its signature dollar prices to $1.25.
It was a big step for a store whose tagline was “Everything’s $1,” though it should be noted Dollar Tree was the only major chain still promising a fixed $1 price for its goods.
Over at Dollar General, the retailer was focusing on a new format called Dollar General Traditional Plus or DGTP, to offer more floor space than traditional stores, leaving room for more coolers and freezers.
The grocery industry is observing all of these strategic moves with interest.
Phil Lempert, founder of SupermarketGuru.com, based in Santa Monica, CA, believes any retailer that sells food—from drugstores to grocery outlets to restaurants—is paying attention to dollar stores and watching to see what happens next.
Citing Dollar General’s 18,000 locations, he says, “Anyone with that many stores is formidable.”
This is an excerpt from the cover story of the March/April 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.