Even Dollar Tree is going after rich shoppers now

By Lily Meier, Max Rivera and Denise Lu, Bloomberg News

Dollar Tree’s 9,000th store opened last year within a few miles of a Louis Vuitton, a steakhouse selling $525 Wagyu beef and Audi, Porsche and Ferrari dealerships, where the average car costs more than what a typical Dollar Tree shopper makes in a year.

Inside, while most everyone is looking for a deal — it’s not necessarily because they need one. On opening day, three Range Rovers were sitting in the parking lot.

“I always call Dollar Tree ‘the add on,’” said Stephanie Williams, while browsing the store on a recent Monday, because it’s where she goes to find frivolous “add ons” to her shopping list. She was eyeing gift bags for candy she’d bought her coworkers.

The new store is in a part of Plano, Texas — a Dallas suburb — that a few years ago would’ve been too fancy for the discount retailer, according to Dollar Tree Inc. Chief Executive Officer Michael Creedon.

“That’s changed,” he said. “Everything’s kinda drifted up.”

Across the U.S., Dollar Tree is moving into more higher-income areas. In the last six years, almost half of new Dollar Tree stores opened in wealthier enclaves of metropolitan areas, according to an analysis by Bloomberg News. In the prior six years, that share was just 41%.

Dollar Tree says shoppers who make over $100,000 are driving much of its current growth. Last quarter, 60% of new Dollar Tree customers made at least six figures. While wealthier people come into the discount retailer less often than lower-income ones, they spend $1 on average more per visit, according to the company. That adds up: If those kinds of occasional shoppers went to Dollar Tree just one more time per year, it would translate to an additional $1 billion in annual sales, Dollar Tree said.

The company is expected to report annual revenue rose more than 10% in 2025 — its fastest annual growth in nearly a decade — and its stock is up 67% from a year ago.

Dollar stores tend to thrive when the economy is shaky and people are looking to trade down. The last time Dollar Tree expanded into higher income parts of the country was during the 2008 recession.

But the company’s current drift upward is less about temporary belt-tightening than an economy that’s increasingly built for the wealthy. As spending concentrates among the top 10% of earners, even low-end retailers, like Walmart, are trying to cater to higher-income shoppers. Instead of relying on consumers to trade down, retailers are themselves trading up.

“It’s a lot easier to make money selling to the high end than the low end,” said Daniel Biolsi, an analyst at Hedgeye Risk Management.

Shoppers at the new Plano store say it’s cleaner and better stocked than others nearby, which can be “hit or miss,” said Ashley Davis, 34, who works in tech support in the area.

“Sometimes the other ones are really cluttered, you can barely get through the aisles,” said Jessica Geisbauer, a 46-year-old stay at home mom, who had come to Dollar Tree to stock up for a Girl Scout party.

Dollar Tree is in the midst of touching up about 3,000 locations and renovating more than 100, the company said.

Showcased up front are the so-called “add ons”: Three weeks before Christmas, neat rows of green and red ribbon line the front aisles. Nearby sit gift bags designed with toy soldiers and peppermint sticks for $2.50 and a “Toyland” section sells plastic standing mixers, grill play sets and construction trucks all for $5.

Everyday essentials, like shampoo and frozen and canned foods — things that lower-income shoppers tend to stock up on at Dollar Tree — are tucked further back.

“This is West Plano, so they know people are a little bit pickier,” said Mashy Modjdehi, a 71-year-old business owner in the area.

She likes to shop at Dollar Tree because she sees it as a low-risk way to try new things. “Even if I didn’t like it, it was $1.25. So, it’s not like I spent so much money,” she said while looking at brow dye.

Dollar Tree’s expansion into wealthier areas can be traced back to its attempt to find its footing after the 2008 recession ended.

As the economy improved and higher-income shoppers stopped trading down, Dollar Tree focused on the low end. In 2015, it bought Family Dollar for more than $8 billion to “extend our reach to low-income customers,” then-CEO Bob Sasser said. Executives at the time told investors the company was prioritizing “consumable core items,” expanding its frozen and refrigerated food offerings, and being “first-of-the-month ready” for shoppers whose government assistance lands in their bank account on that day.

The chain had locked itself into “a little bit of that stigma of the dollar store,” current CEO Creedon said.

As dollar stores have proliferated in towns across the U.S., they’ve faced criticism for poor working conditions and undercutting other local shops, leaving poor or rural areas with fewer options. The backlash prompted dozens of small towns around the U.S. to block new stores, and in some cases, pass laws restricting new ones from coming in.

Dollar Tree has expanded its safety and compliance procedures, the company said.

Dollar Tree was also running up against the limits of selling things so little. While it could turn a profit on small items like nails, it couldn’t stock bigger items that people might want to buy at the same time, like hammers, without raising prices or taking a big loss.

In 2019, the chain made a radical decision: Defying its very name it started to sell products in select stores for up to $5. Two years later, it expanded the pilot into more stores and again broke from its namesake, raising its base price to $1.25. By 2025, it sold items for up to $7 and has a variety of price points in all of its locations. That same year, it sold off Family Dollar, which was underperforming.

By offering more expensive products, Dollar Tree was able to move into more expensive areas. Last year, more than a quarter of Dollar Tree stores opened in ZIP codes where the median household income was at least $100,000.

Because the new stores have moved into areas that had robust retail, they weren’t seen as a blight or a sign of neighborhood in decline, said John Muns, the mayor of Plano. “Its really not a dollar store that we all think of,” he said. It’s more like Target or Walmart — somewhere to go pick up quick things — but more accessible than those big box stores.

Dollar Tree hasn’t abandoned the low-income shopper. The company is also moving into lower-income metropolitan areas and last quarter, it reported spending growth across all income sub-cohorts, including households earning below $20,000.

Davis, who works in tech support, is more like the traditional Dollar Tree customer. She shops at Dollar Tree to save money on essentials, like cookware and toothpaste. Even though the prices have gone up, she still loves going to the Dollar Tree, she said. “I can get in, get out and I’m not spending hundreds of dollars on the smallest things.”

Plano locals may go to Dollar Tree for different kinds of things, but they like it for the same reason: It’s convenient and cheap. “I needed something in a hurry and I didn’t want to face Target or Walmart,” said Karen Henning, who is retired. She had popped into the new store to buy scotch tape, but while there she was thinking of picking up some candy for her grandkids, too.

Methodology: Bloomberg News estimated Dollar Tree store opening dates by matching unique store numbers, when available, with investor reports on when new stores opened. The total number of per year store openings was based on figures from Dollar Tree’s 2025 investor day report.

Incomes are median household incomes as reported in the U.S. Census 5-year American Community Survey for the estimated year of the store opening. Bloomberg News’s analysis compares the median household income of the ZIP code tabulation area and that of the metropolitan area of each store address for that year. 2024 and 2025 numbers are adjusted from 2023 dollars, the latest data available.