Dollar Tree, the popular discount retailer, is making some changes to its pricing strategy. In its recent earnings call, the company announced that it is raising its price cap to $7 on certain items. This follows previous increases from $1 to $1.25 in 2021 and to $5 in June 2023.

“This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” said company CEO Rick Dreiling during the call. This change will affect the prices of food, pet, and personal care items.

Dreiling also mentioned that Dollar Tree is catering to a growing demographic with a yearly salary of over $125,000. InMarket’s recent report supports this finding, showing a 4% increase in visits to dollar stores by consumers earning more than $100,000 between the second half of 2022 and 2023.

To accommodate this expanded range of prices, Dollar Tree plans to integrate multi-price merchandise more prominently in its stores. For example, shoppers will now find $5 bags of dog food next to the traditional $1.25 pet treats and toys. Similarly, $3 bags of candy will be located in the candy aisle.

In addition to the pricing changes, Dollar Tree will be closing approximately 600 Family Dollar locations in the coming years. The company acquired Family Dollar in 2014 for $8.5 billion. As part of this closure plan, around 400 Family Dollar and Dollar Tree stores will be shut down due to lease expirations. The affected cities include Middletown, N.J., Tallahassee, Fla., Peoria, Ill., Lynchburg, Va., East Liverpool, Ohio, Wilmington, N.C., Slocomb, Ala., Humansville, Mo., Willow Springs, Mo., Wichita, Kan., Clearwater, S.C., and Elkins, W. Va.

Throughout the fiscal year that ended on February 3, 2024, Dollar Tree operated 16,774 stores across 48 states and five Canadian provinces. During the fourth quarter alone, the company opened 219 new stores. Moving forward, Dollar Tree plans to make the “$3 and $5 center-store merchandise available at approximately 5,000 stores” and offer “$3, $4, and $5 frozen and refrigerated items at more than 6,500 stores.”