The price is still right at dollar stores. Exactly what that price is, though, appears to be a point of some contention—and competition—among dollar store giants.
Dollar Tree bucking of its $1 price point—the company has moved to $1.25 price tags—has clearly helped boost profitability. Dollar Tree said on Thursday that gross margins at its namesake chain touched 37.4% in its quarter ended July 30, up 5 percentage points from a year earlier. Meanwhile, margins are declining at Dollar Tree-owned Family Dollar, a traditional laggard, as the chain marks down prices to close its historical gap with competitors. Dollar Tree competitor Dollar General has stuck to its $1 price point, which typically accounts for one-fifth of its products, and said that price point was one of the fastest-growing subcategories last quarter.