Local

Last year, Dollar Tree announced the end of $1 prices. Now, competitors are taking advantage

Let the $ 1 price battle begin. Last year, Dollar Tree announced that it was moving away from $ 1 and raising prices on most products to $ 1.25. With the Dollar Tree dropping $ 1, Dollar General’s main competitor sees an opportunity to attract some customers. Dollar General advertises $ 1 prices to customers in stores to promote the idea that it’s the place to save money as everything becomes more expensive. Dollar General is “trying to win over Dollar Tree buyers” and position itself as a trading option, said Evercore ISI analyst Michael Montani. With most of its stores in rural areas, Dollar General targets low-income customers and sells food and household necessities. In contrast, Dollar Tree, a smaller competitor, operates stores mainly in the suburbs targeting middle-income customers chasing party items and other gifts. However, the largest dollar store chains in the United States are not real dollar stores. Dollar General, for example, has not sold everything for a dollar for decades, and only about 20% of its commodities are $ 1 or less. But recently, Dollar General has placed more of its $ 1 products in the top positions in stores and added signs that underline these prices. It is also considering increasing its $ 1 item range, the company said this week. “In fact, we are priced at $ 1,” CEO Todd Vassos said in a call with analysts on Thursday. The Dollar General “really pushes it [$1] “Dollar General’s core customers, many of whom have stable incomes, often run out of money at the end of the month,” Vassos said. “Offering $ 1 items.” bridges Last days for her “and help her” finish her month. “Gas prices have risen more than $ 4 and Dollar General expects customers to drive less and shop closer to home. In the United States, including some cities where the only store is around, Dollar General believes that these trends are working in its favor and buyers will skip the higher priced stores and retreat, especially for $ 1 products. “Consumerism usually means we need more,” said Vasos. $ 1 was the identity of the Dollar Tree brand for 35 years and its decision to go to $ 1.25 risked driving away customers. But higher inflation in the last 40 years has forced the Dollar Tree to make changes. It raised prices because its business was under pressure because it had to keep everything below $ 1, with increases in labor, transportation, fuel, freight and shipping costs squeezing the company’s profits. The jury is still out on the impact of change. Earlier this month, Dollar Tree said prices of $ 1.25 helped boost sales, but also noted that buyers were buying fewer items as a result. Some Dollar Tree loyalists also protested the price increases.

Let the $ 1 price battle begin.

Last year, Dollar Tree announced that it was moving away from $ 1 and raising prices on most products to $ 1.25. With the Dollar Tree dropping $ 1, Dollar General’s main competitor sees an opportunity to attract some customers.

Dollar General advertises $ 1 prices to customers in stores to promote the idea that it’s the place to save money as everything becomes more expensive. Dollar General is “trying to win over Dollar Tree buyers” and position itself as a downsizing option, said Evercore ISI analyst Michael Montani.

With most of its stores in rural areas, Dollar General targets low-income customers and sells food and household items. In contrast, Dollar Tree, a smaller competitor, operates stores mainly in the suburbs targeting middle-income customers chasing party items and other gifts.

However, the largest dollar store chains in the United States are not real dollar stores. Dollar General, for example, has not sold everything for a dollar for decades, and only about 20% of its commodities are $ 1 or less.

But recently, Dollar General has placed more than $ 1 items in the top positions in stores and is adding signs that highlight these prices. It is also considering increasing its $ 1 range, the company said this week.

“We’re actually leaning in at $ 1,” CEO Todd Vasos told analysts on Thursday. The Dollar General “really pushes it [$1] side of the business because I believe that our customers will need us even more there “.

Dollar General’s main customers, many of whom have stable incomes, often run out of money at the end of the month, Vassos said. Offering $ 1 items “bridges that last a few days for her” and help “complete her month”.

Gas prices have risen more than $ 4 and Dollar General expects customers to drive less and shop closer to home. With 18,000 stores in the US, including some in cities where it is the only store, Dollar General believes that these trends are working in its favor and buyers will bypass the higher priced stores and trade, especially for $ 1 products.

“Difficult times for the consumer usually mean that we need more,” Vassos said.

As Dollar General stepped up its $ 1 strategy, the Dollar Tree moved away from them – even though $ 1 was the Dollar Tree brand identity for 35 years and its decision to move to $ 1.25 risked driving customers away.

But higher inflation in 40 years has forced the Dollar Tree to make changes. It pushed up prices because its business was under pressure because it had to keep everything below $ 1, with increases in labor, transportation, fuel, freight and shipping costs squeezing the company’s profits.

The jury is still out on the impact of change. Earlier this month, Dollar Tree said prices of $ 1.25 helped boost sales, but also noted that buyers were buying fewer items as a result. Some Dollar Tree loyalists also protested the price increases.

Last year, Dollar Tree announced the end of $1 prices. Now, competitors are taking advantage Source link Last year, Dollar Tree announced the end of $1 prices. Now, competitors are taking advantage

Related Articles

Back to top button