Dollar Tree Gaining Customer Relevance

 

Consumers are dynamic not static and companies must be as well.  In a world where consumers pay keen attention too price, value, service at retail there can be no mistake that Dollar Tree has garnered the respect from its customers. 

Consumers are evolving all the time within each brand according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. In the case of “Dollar Tree” the company has been moving forward but not fast enough for consumers according to Johnson, who noted that Dollar Tree’s rate of growth had slowed down.  Johnson also noted that Dollar Tree continues to grow at a rate faster than most grocery store, c-stores, or chain restaurants.

So, last week Dollar Tree stated that it would accelerate ongoing efforts to expand price points through its Dollar Tree Plus! initiative. Separately, the company will begin testing higher price points on merchandise at legacy Dollar Tree stores, thus allowing them to offer an incremental mix that will drive discovery according to Johnson. 

More about ‘The Plus’! departments are helping to bring Dollar Tree additional product sizes and category variety, with expanded availability of selections in areas such as crafts, home décor, kitchen goods, toys and cleaning supplies at price points of $3 or $5.

So, Dollar Tree Plus! could well reach 500 of its Dollar Tree stores this year. The announcement this week said that 1,500 more stores are planned for fiscal 2022, and at least 5,000 are expected to open by the end of fiscal 2024.

Company officials framed the separate move to test additional price points at legacy stores—$1.25 and $1.50 were mentioned—as a means to expand assortments over time while maintaining a promise to bring shoppers a value-focused, treasure-hunt experience. There could be aisles with product for $1, $2, $3, $4, or more. Consumer understand ‘stuff’ cost more today than it did three years ago, they want discovery.  Changing the price points will drive innovation in product mix, which will drive discovery and consumer relevance.

In a battle for Share of Retail

are you Evolving Share of Stomach

Dollar Tree CEO Michael Witynski, stated, “our customers have enjoyed the ‘thrill-of-the-hunt’ for value at $1—and we remain committed to that core proposition—but many are telling us that they also want a broader product assortment when they come to shop. We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs,”.

These recently announced moves accompany a separate initiative launched last year to open “combination” stores that leverage sister brand Family Dollar in a dual-branded store format that brings the $1 price point to rural markets previously thought too small to support a single-price point merchant, along with Family Dollar’s legacy EDLP variety. The team at Foodservice Solutions® believes that the combination stores will become a valued platform.

Let’s talk about growth. Family Dollar-Dollar Tree “Combo Stores”—primarily renovated and re-bannered Family Dollar locations—currently number 105, but officials said 400 are on the way in 2022, with the potential of as many as 3,000 over the next several years.

Did you know that Dollar Tree, operates nearly 16,000 stores across 48 states and five Canadian provinces? How fast is your company growing?

Witynski, continued, “We are a ‘test-and-learn’ organization which is what we are doing with this new initiative,” … “We listen to our customers and believe it will make shopping with us an even better experience. Our merchants have proven that they are among the best in the industry in working with suppliers to create extreme value, and we will continue to deliver the ‘thrill-of-the-hunt’ to our customers.”

Consumers are dynamic not static.  Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter