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Should Dollar Tree Abandon Its One Dollar Roots? | The Motley Fool

Dollar Tree (NASDAQ:DLTR) is known for its no-nonsense, everything-for-$1 pricing model. The company has been able to maintain it since it was founded in 1986, but given inflation and other pressures, some investors have called into question the long-term viability of this strategy.

Embracing a willingness to test new ideas, the company announced it would experiment with multi-tier pricing at a limited number of test stores. This is a major change to the business model that could have big implications for the company’s brand and financial future if adopted across the chain.

Dollar Tree’s pricing model
Dollar Tree operates two retail brands, Dollar Tree and Family Dollar. The former is a discount variety store selling everything at a $1 or less; the latter, like Dollar General, is more of a discount grocery store and already sells items at various price points.

How has Dollar Tree kept up this strategy for the past 30 years? The company has primarily maintained its low prices by keeping its product sourcing costs low and delivering true value to its customers. Efficiently operating its global supply chain and network of over 7,100 stores has been the company’s core competency and a key driver of its success.

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Should Dollar Tree Abandon Its One Dollar Roots? — The Motley Fool.

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