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Chesapeake, Virginia— Shoppers headed to Dollar Tree for super cheap party supplies and holiday decorations. But now, as food prices continue to rise, consumers are stopping by Chesapeake, Virginia-based Dollar Tree and its flag, Family His Dollar.
For the second consecutive quarter, same-store sales of consumables exceeded Dollar Tree’s discretionary sales. Retailers compared him to 9.3% last week in food and beverages, snacks, cookies and candy. Dollar Tree comparable store sales increased 8.6%.
Family Dollar saw same-store sales growth of 4.7% in food and beverages, outpacing 4.1% same-store sales growth across the chain.
Retailers expect consumables to outperform discretionary goods in the fourth quarter, saying this is putting pressure on margins. But Dollar Tree said it is investing heavily in food merchandising to capture growing consumer interest.
“The trading at the beginning of the month has been strong,” Dollar Tree CEO and president Michael Witynski told analysts in late November. “The SNAP and food stamp business is growing and we continue to see credit outstripping debit. We are shifting to consumables and need-based to achieve
Like many retailers during this period, Family Dollar said it had a strong interest in its own branded merchandise. For the 39th straight week, private-label sales have outsold national-brand sales, Witynski said. First time in 5-7 years.
The company is working to “grow and improve” the performance of its private label by expanding its product selection, he said. will focus on pharmaceuticals and health products, followed by paper products and food.
Growth in frozen and chilled products is another key area of focus for Dollar Tree, the company said.
“Every time we refurbish a store, we want to add more coolers for both cold and frozen drinks, as customers move there,” says Witynski. “It’s a useful item and meets their needs, so there’s room for continued expansion there.”
The retailer recently added multiple price points at $3 and $5 to its frozen food category, to great success.
“The refrigeration business has declined over the past 18 months due to the same pressures we’ve seen in consumables,” he said. “And now we’ve completely reversed it… In the frozen food segment, the cost pressure at $1.25 makes it even harder to get a great selection at $1.25.”
Prices are listed on the freezer door, Dollar Tree said.
Company executives expect these freezers to be stocked with more items in the near future.
“We’re aggressively expanding our protein, pizza, breakfast items, and family size offerings at price points that fit your budget,” Witinski said.
This story was originally Winsight Grocery Business.
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