Dollar Tree's plan for $7 items has shoppers angry

Dollar Tree's plan to add items up to $7 is pushing customers to other retailers like Walmart.

• Dollar Tree customers say they'll shop at Walmart and elsewhere as store adds more expensive items.
• The retailer said in March that some items would cost up to $7. 
• Despite some higher-income shoppers, many dollar store customers are still on a tight budget.

Dollar Tree is adding items with prices as high as $7, causing customers to question whether shopping at the dollar store is even worth it anymore.

Everything at Dollar Tree was a single price for years — $1, then $1.25. That helped it stand out from Dollar General, which has sold merchandise at various price points for years.

Now, as Dollar Tree strays from its traditional pricing strategy, customers are considering shopping elsewhere.

"If it were really going to go up like $7… that'd be too much," Scott Kolack, a shopper at a Dollar Tree store in West Palm Beach, Florida, told local TV station WPTV. "I'd rather just get everything at Walmart."

In the weeks since the $7 price announcement, some Dollar Tree customers have commented on the company's Instagram posts expressing their displeasure.

"$7 dollar store!! Not shopping with y'all no more," one comment on a March 25 post reads.

"$1.25 was acceptable, but $7?" another commenter wrote a few days later. "We might as well go to Five Below, Family Dollar, Dollar General. Don't be surprised when business depreciates."

Dollar Tree didn't immediately respond to a request for comment from Business Insider.

The higher prices aren't coming to all Dollar Tree stores right away. A selection of about 300 items, which are priced between $1.50 and $7, is being rolled out to 3,000 Dollar Tree locations, CEO Rick Dreiling said earlier this year. The company operates about 8,000 stores under the Dollar Tree brand, as well as a similar number that uses the Family Dollar name.

Last year, Dollar Tree started experimenting with prices as high as $5. The more expensive products included items that the retailer's executives said they hadn't previously been able to offer, like frozen waffles and coffee creamer.

Many shoppers have flocked to dollar stores to save money as inflation has pushed prices for many consumer goods higher. Dollar Tree has even said it's noticed more customers who make six-figure incomes stopping by its stores.

But many other, less-affluent Dollar Tree customers are likely to be turned off by the higher prices, one Dollar Tree store manager in Minnesota — who worked for the company for a decade-and-a-half before leaving in 2022 — told BI.

The manager recalled that many customers bought fewer items after Dollar Tree's 2021 decision to increase prices to $1.25.

"Your average sale should actually go up a little bit if they're paying more," the manager said. Instead, he saw "everybody at the registers counting and saying, "Oh, geez, I'm at $5 already. That's only four items.'"

"A quarter don't sound like much, but when that's the people you're catering to, it is a lot," he said.

Do you work at Dollar Tree, Family Dollar, Dollar General, or another retailer and have a story idea to share? Reach out to this reporter at abitter@businessinsider.com