Dollar Tree CEO Michael Creedon is addressing shopper concerns after the company raised prices again!
Many customers noticed items previously costing $1.25 now selling for $1.75, prompting the CEO’s response.
Speaking to The US Sun, Creedon outlined two main factors behind the price hikes and promised to continue providing value to shoppers on a budget.
He explained that introducing new price points beyond the $1.25 baseline helps offset the impact of tariffs and rising costs.
Dollar Tree has previously tried tackling these challenges by negotiating with suppliers and even discontinuing some products, but these efforts didn’t yield significant results.
Creedon acknowledged the uncertainty surrounding how the trade war would affect Dollar Tree but emphasized that the company was actively exploring ways to lessen the impact. One key approach, he noted, was the multi-pricing strategy.
“In terms of the different price points, we look at that value,” Creedon explained.
“We look at convenience and we look at discovery and we say where can we offer that and maybe move on some pricing as part of not just tariffs, but an inflationary cost environment that we’ve got to mitigate.”
“And so that’s where you’re seeing that work where it makes sense. And I think we’re positioned better than we ever have before to manage what is a very uncertain and volatile arena that we’re in,” he added.
Dollar Tree shoppers can expect higher prices as the company rolls out more 3.0 locations, Creedon told the outlet.
Stores under this pricing model, whether newly opened or converted, feature a wider selection of multi-price items ranging from $1.25 to $7, he explained.
Dollar Tree also runs 2.0 locations, where a smaller selection of higher-priced products is limited to a single aisle known as “the valley.”
Meanwhile, 1.0 stores stick to the classic model, with over 95% of items priced at $1.25.
The chain has slowly been transitioning to the 3.0 model, which is reportedly more profitable thanks to higher prices and a wider selection of products with better margins.
At the close of the 2024 fiscal year, Dollar Tree had approximately 2,900 3.0 format stores, including about 2,600 converted locations and 300 new locations, Creedon shared.
The company aims to expand to 5,200 3.0 locations by the end of 2025, with plans to convert 2,000 more stores and add 300 new ones under its highest-priced model.
Dollar Tree is making another bold move, selling its Family Dollar subsidiary for $1 billion after announcing plans to shut down 1,000 stores.
