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It’s right there in the name.
As tariffs loom and the holiday shopping season approaches, Dollar General is leaning into a novel strategy: Sell more items that actually cost $1.
Dollar stores have spent years raising prices and adding products that cost more than $1 each. But Dollar General CEO Todd Vasos said that customers are increasingly choosing items at the very price point that lends its name to the chain.
Case in point: A rotating selection of about 500 items that Dollar General sells in its stores for $1 — which the company calls “Value Valley” — sold at twice the rate of everything else that the retailer sold during its second quarter, Vasos said on the company’s most recent earnings call. That made the $1 section “one of our strongest performing areas in the quarter,” he said.
“We know this price point is important in helping our core customers stretch their dollar, particularly at the end of the month and when budgets are tight,” he added.
Vasos said the focus on value-priced items “will continue to be important for our customers, particularly in the back half of this year.”
Some dollar stores used to stick closely to the $1 price point. Dollar Tree, for example, sold many items for $1 each until 2021, when the retailer increased the price of most of those items to $1.25. This summer, Dollar Tree increased some prices again, this time to $1.50.
Dollar General sells many items that cost $10 or more each. Like other discount retailers, Dollar General has seen more visits from high-income shoppers in recent years as many look to save money.
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All of that has left fewer items for sale for just $1. “It’s a very elusive price point at this point,” Dollar General’s Vasos said on Thursday.
With many shoppers looking for value in the face of tariffs, though, Dollar General is trying to make the $1 price point work.
About a quarter of the items the chain is offering going into the final months of the year — including merchandise for holidays such as Halloween and Christmas — will be priced at $1, Vasos said during the earnings call.
Year-round, about 2,000 items at Dollar General cost $1 or less, he said.
“Even in the face of tariffs, we’ve been able to maintain a $1 price point in our seasonal offering, which should resonate with the consumer,” Vasos said.
Do you have a story idea about Dollar General or another major retailer? Reach out to this reporter at abitter@businessinsider.com
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