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Everything’s Not $1 at Dollar Tree Anymore, In New Pricing Test | Coupons in the News

It may cost you several dollars to buy something at Family Dollar, while Dollar Tree’s selling point has always been that every item in the store is just $1. Now, though, the common owner of the two dollar store chains is flipping the script – Family Dollar will begin selling more items for just $1, while Dollar Tree will begin selling items with a price tag of $1.25, $1.50, $2 or more.

But while the company seems excited about the changes at Family Dollar, it’s shaking up Dollar Tree’s format begrudgingly – and all but predicting that customers won’t like it.

So then why do it? Because a major shareholder is demanding it.

“We’re open to ideas, good ideas that work,” Dollar Tree CEO Gary Philbin told investors yesterday. One of those ideas is “introducing multiple price points at Dollar Tree”, which Philbin said “we are open to”.

So Philbin said Dollar Tree is “thoughtfully and carefully” introducing the concept to “specific locations”. While he didn’t say where exactly, or in how many stores for starters, he did say it would be in areas served by distribution centers that stock both Dollar Tree and Family Dollar stores. That likely refers to the company’s joint distribution centers in Utah and Missouri, which serve a wide swath of the Central and Western U.S., from Missouri, up to North Dakota and Montana, and all the way back down to Arizona.

So if you shop at a Dollar Tree in that general area, keep an eye on the prices – because they may be changing.

Hedge fund Starboard Value, one of Dollar Tree’s largest investors, first pushed the idea back in January.

“Other dollar stores and discount retailers have moved away from a single price point approach with tremendous success,” Starboard wrote in a public letter addressed to Philbin. “By introducing a few additional low price points, while keeping the majority of products priced at $1.00, we believe that Dollar Tree could dramatically improve its product assortment and offer far more value to its customers” – and to its shareholders, Starboard said.

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Everything’s Not $1 at Dollar Tree Anymore, In New Pricing Test – Coupons in the News.

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