There's been a lot of buzz in the dollar channel for beauty, and the potential is huge, with more than 35,000 value stores across the US of all sizes and with varying commitments to beauty and personal care.
Based on positive customer reaction and the success of its new Combo and Dollar Tree Plus store formats, the retailer will begin adding new price points above $1 across all Dollar Tree Plus stores and testing additional price points above $1 in selected legacy Dollar Tree stores.
Michael Witynski, President and Chief Executive Officer, stated, "For decades, our customers have enjoyed the 'thrill-of-the-hunt' for value at one dollar—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."
Dollar Tree is on track in 2021 to have 500 Dollar Tree Plus stores by fiscal year-end offering an assortment of value-priced $1, $3, and $5 products. Another 1,500 stores are planned for fiscal 2022, and at least 5,000 Dollar Tree Plus stores are expected by the end of fiscal 2024.
The retailer is also seeing success with its newest store format, the Combo Store, which leverages the strengths of both banners by bringing a multi-price assortment to Dollar Tree shoppers. The company currently has 105 Combo Stores and expects to add 400 Combo Stores in fiscal 2022, with the potential of up to 3,000 over the next several years.
“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," Witynski added. "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.”
Competitor Dollar General is also testing higher price points with a new format called Popshelf, targeting a slightly higher-income consumer ($50,000 to $125,000 versus $30,000 to $40,000). There are only a handful of Popshelf locations currently, but plans call for 50 more this fiscal year. It plans to open 1,050 Dollar General stores, remodel 1,750 sites, and relocate 100 others.
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