USA: Dollar Tree gets a big boost from shoppers making over $100K
- DRC Discount Retail Consulting GmbH
- 14 hours ago
- 2 min read
Discount Variety Retail Chain Dollar Tree reported that higher-income shoppers are contributing to one of its most successful recent quarters, fueling a resurgence for the retailer.
The retailer saw 3 million more households shop its stores during the third quarter compared to the prior year, and about 60% of those shoppers came from households earning over $100,000, equal to the combined share of middle-income households (earning $60,000 to $100,000 at 30%) and lower-income households (earning under $60,000).
Third-quarter net sales reached $4.7 billion, a 9.4% year-over-year increase, and same-store net sales rose 4.2%. Consumables increased 3.5%, led by snacks, personal care, household cleaning supplies and cookies.
Dollar Tree responded to the momentum by standing firm with its full-year fiscal 2025 net sales guidance to a range of $19.35 billion to $19.45 billion and bumping up the low end comparable-store net sales growth, which is expected to land between 5% and 5.5%. Earlier projections had comparable-store net sales growth falling in the 4% to 6% range.
“Over time, our goal is to inspire the same level of loyalty in our newer, higher-income customers that we see in our core customers,” Michael Creedon, CEO of Dollar Tree, said during the earnings call. “Many of our higher-income customers are still early in their relationship with Dollar Tree. Their purchase frequency has significant room to grow.”
The strong third quarter also shows the effectiveness of Dollar Tree’s multi-price strategy. Traffic dipped slightly, partly due to a slow start to back-to-school season. The quarter finished strong thanks to Halloween and Thanksgiving demand. Each multi-price item sold during Halloween generated 3.5 times more profit than each non-multi-price item, according to Creedon.
“Multi-price was a key driver of our Q3 momentum,” he said. “We believe these results reflect our sharper focus and more disciplined execution.”
To retain higher-income shoppers, the Chesapeake, Va.-based retailer is emphasizing cleaner, well-stocked stores. Dollar Tree has introduced new tools and training to simplify store routines and increase accountability.
The company also plans to remove slow-moving SKUs to open shelf space for more productive items. Creedon expects sales and profits per store to grow under the new strategy.
Still, Dollar Tree views its lower-income customers, who delivered the strongest Q3 comps, as its core base and a priority.
Creedon said the retailer’s goal is to create a “sticky relationship” with higher-income shoppers by offering a relevant assortment and operating better stores.
“We believe as we continue to improve the in-store experience, those customers are going to want to come more and more often,” Creedon said.
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