Dollar Tree Sees Surge in Higher-Income Shoppers
Dollar Tree is now drawing in a more affluent crowd than ever, as even higher-income consumers look for ways to cut costs.
With inflation continuing to stretch household budgets, many shoppers are rethinking where they buy everyday items. Surprisingly, Dollar Tree is now drawing in a more affluent crowd than ever, as even higher-income consumers look for ways to cut costs.
Retail Dive shared remarks from Dollar Tree CEO Mike Creedon, who told analysts in a conference call that the chain added 2.6 million new customers in the Q1 period. Additionally, most of them were from higher-income households earning $100,000 or more annually.
Emarketer analyst Rachel Wolff added her thoughts as to why shoppers are flocking to the discount retailer more than ever. She told Retail Dive, “Dollar Tree is benefiting from the current period of uncertainty, as shoppers of all incomes turn to discounters more often to stretch their budgets.”
Wolff added, “While the company has struggled in the previous quarters compared with Dollar General, the sale of Family Dollar is allowing Dollar Tree to shore up its bottom line and offer more value to shoppers. Those efforts are clearly resonating. Unlike Dollar General, Dollar Tree grew both ticket size and traffic during the quarter, a sign that more shoppers are turning to the retailer more often.”
PYMNTS quoted Dollar Tree’s former CEO, Rick Dreiling, in 2024, who believed the additional foot traffic from higher-income shoppers brought “firepower” to the retailer. “The fastest-growing demographic is north of $125,000 a year in income, which brings a lot more firepower to the store. I think that attraction is the multi-price point and the fact that we’ve been able to increase the variety of product in the store,” he said in March 2024.
As financial stress mounts, chains like Dollar Tree and Academy that cater to the budget-conscious are seeing more of a new class of shoppers https://t.co/keNfg8L9aU— The Wall Street Journal (@WSJ) April 18, 2025
A Q1 report for Dollar Tree reveals that for the quarter that ended May 3, 2025:
- Dollar Tree reported a 5.4% increase in same-store net sales, with traffic also rising by 2.5%.
- The company reaffirmed its full-year fiscal 2025 net sales guidance, expecting between $18.5 billion and $19.1 billion.
- The sale of Family Dollar remains on track to close in the second quarter of fiscal 2025.
“Our strong first quarter performance underscores the progress we’ve made against our strategic priorities and is a clear signal that our customers are responding positively to the changes we are making,” said Creedon in the Q1 report. “History has shown that we have the resilience to emerge stronger from periods of economic uncertainty, and in today’s rapidly evolving environment, we see a meaningful opportunity to further elevate the value, convenience, and discovery that our customers depend on Dollar Tree to provide.”
What Does Dollar Tree Anticipate for Q2 Sales?
Dollar Tree shared its prospectus for a second-quarter outlook in the Q1 report. The company believes its second-quarter sales will grow near the higher end of its full-year forecast of 3% to 5%.
For the remainder of fiscal 2025, Dollar Tree will continue to handle the pressures of higher tariffs. They expect second-quarter adjusted earnings per share to drop by about 45% to 50% compared to last year, but then improve in the third and fourth quarters to meet the company’s full-year goals.
