Dollar Tree Gains 6.5 Million Households as Consumers Chase Value

Dollar Tree is reaching more households across all income levels as higher income households increasingly trade down and lower income ones try to stretch their paycheck, Dollar Tree CEO Mike Creedon said Monday (March 16) during the company’s fourth quarter earnings call.

The company gained 6.5 million net new households during the fourth quarter, bringing its total to a record 102 million, Creedon said.

“The growth in households continues to be broad-based and accelerated sequentially,” Creedon said.

This expansion has been aided by the company’s multi-pricing strategy, which includes prices above $1.25. The higher price points allow the company to offer larger pack sizes, which are appealing to all customers, Creedon said. Dollar Tree has seen strong growth in the $3 to $5 range, driven by larger pack sizes.

The recent surge in gas prices affects all households, Creedon noted. Those higher costs have led to accelerated trade-down among middle- and higher-income consumers, as well as to demand for larger pack sizes among lower-income shoppers who have traditionally been Dollar Tree’s core customers.

“The price impacts everyone,” Creedon said. “For us, Dollar Tree is really that key tool that helps them manage their budgets and deal with these higher prices.”

Dollar Tree converted or added 2,400 stores to the Dollar Tree 3.0 multi-price format during fiscal 2025, bringing the total number of multi-price stores to 5,300, according to a Monday earnings release. The company has more than 9,000 stores, Creedon said during the call.

The multi-price format contributed to a higher average ticket, helping drive year-over-year comparable store net sales growth of 5% during the company’s fourth quarter, which ended Jan. 31. A 6.3% increase in average ticket offset a 1.2% decline in traffic, per the release.

Multi-price products accounted for 16% of Dollar Tree’s sales in the fourth quarter, according to a presentation released Monday.

In terms of product mix, the company saw 6.2% growth in sales of discretionary items and 3.6% growth in consumables, per the presentation.

“We see discretionary outperformance as an indicator of customer receptivity to expanded value, with shoppers gravitating toward broader assortments and higher value options,” Creedon said.

Rival retailer Dollar General reported Thursday (March 12) that its same-store sales rose 4.3% in the fourth quarter, reflecting stronger customer traffic, larger transaction sizes, and the importance of value and convenience for shoppers navigating an uncertain economic environment.