Dollar Tree Raising Max Price to $7 in Thousands of Stores

Get ready to pay more at your local Dollar Tree store. The company said it will now allow prices up to $7 at 3,000 of its stores across the country.

"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," Dollar Tree CEO Rick Dreiling said in the company's recent earnings call.

This is a big increase from the previous $5 maximum price that was just set last June. The base price for most items is also going up from $1.25 to $1.50.

So what kinds of products will cost more? According to Dreiling, shoppers can expect to see pricier options for food, pet supplies, and personal care items mixed in with the standard $1.50 merchandise. "You will see us fully integrate multi-price merchandise...so our shoppers will find $5 bags of dog food next to our traditional $1.25 pet treats and toys, and our $3 bags of candy will be found in the candy aisle."

The moves come as Dollar Tree says its customer base is trending towards higher income households. "The fastest-growing demographic is north of $125,000 a year in income," Dreiling noted.

While raising prices at the store that used to only sell items for $1, Dollar Tree is also closing down some locations. The company announced it will be closing around 600 Family Dollar locations this year, with plans to shut down an additional 400 Family Dollar and Dollar Tree stores in the coming years as leases expire.

As Dollar Tree changes its pricing and number of stores, its main competitor Dollar General just opened its 20,000th store location. It's uncertain how Dollar Tree's big changes will affect its ability to get budget shoppers in the crowded discount store market.