Dollar Tree raises prices again, frustrating budget shoppers

Dollar Tree has long attracted consumers, and for good reason. When you walk into a store like this, you pretty much know what you’re going to get.

You don’t have to do much or any comparison shopping to see if there’s a better deal on spatulas or kitchen towels elsewhere, because chances are they don’t.

If you’re honest with yourself, you’re probably not going to get the highest quality items at Dollar Tree for six to seven times the same price compared to what you’d find on Amazon or a big box store.

But when you can get a much-needed item home for $1.25, and the next cheapest option is the $8.95 version you saw at Target, it’s hard to argue with that—especially if you’re on a tight budget.

But Dollar Tree’s famous price point — now $1.25, by the way — is something fans of the store shouldn’t get too comfortable with.

Dollar Tree has been sending out signs that it’s looking to raise prices. This could be a huge blow to cash-strapped shoppers.

Dollar Tree’s multi-price strategy didn’t go down well with low-income customers.Shutterstock

Dollar Tree reported a 0.3% year-over-year traffic decline last quarter. This is largely because low-income shoppers go there less frequently.

As Neil Saunders, managing director at GlobalData, told RetailDive, “There’s a lot of talk at the moment about restrictions on low-income consumers, many of whom are core Dollar Tree customers. We’re seeing some of those pressures and pressures in the data, and the impact of their reduced visits to Dollar Tree.”

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Now it’s also worth noting that Dollar Tree’s same-store net sales increased 4.2% in the quarter.

However, this growth may not be driven by steady traffic but by higher prices.

Dollar Tree has been experimenting with higher-ticket items over the past few years. Walk around the store and you’ll see a lot of items in the $5 to $7 range.

That’s a problem for low-income shoppers, who are used to the predictability of walking into a Dollar Tree and buying super-low prices.

In fact, Dollar Tree appears to be doubling down on its big-ticket items. As CEO Mike Creedon said: “Our multi-price strategy drove strong momentum across our business in the third quarter and helped set an all-time Halloween season record.”

It’s clear from Dollar Tree’s recent earnings calls and statements that the company is committed to attracting a wider range of customers than it has in the past.

As Creedon says, “Today Dollar Tree is a premier destination for many shoppers—whether they rely on us for daily essentials, enjoy quick and easy travel, or enjoy the excitement of discovering something unexpected.”

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But Creedon also made it clear that the store’s multi-price strategy will continue. This is a problem for consumers who can’t afford to buy a $5 or $7 item as well as a $1.25 item.

This is also a potential problem for Dollar Tree. The company is taking a big risk because its attempts to attract higher-income consumers could alienate its core customer base.

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In 2021, when Dollar Tree first began rolling out pricier products more broadly, Telsey Advisory Group analysts told Retail Dive that the move was “part of Dollar Tree’s broader strategy over the medium term to help offset rising costs, including raw materials, supply chain and labor.”

But it’s clear that price increases are, in fact, not a mid-term move for Dollar Tree. They appear to be becoming the new normal, which is bad news for the consumer base the chain wants to reach.

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This article was originally published by TheStreet on December 11, 2025, and first appeared in the Retail section. Click here to add TheStreet as your preferred source.