Dollar Stores Grow Traffic With Opposite Pricing Playbooks

Dollar General plans to make $1-or-less items 40% of all SKUs in the second half of the year, after comparable sales of its Value Valley $1 assortment grew 16% in Q2 — more than four times the 3.5% comp gain for the chain overall.

The two biggest US dollar stores posted increased traffic in Q2, but they hooked customers with sharply different pricing and assortment strategies, as the New York Times reported. Dollar Tree expanded its range of price points through its new multi-price strategy. Dollar General doubled down on the $1 price point that built its name.

Dollar General reported 5.2% net sales growth for the quarter. Chief Operating Officer Emily Taylor, speaking on an earnings call last week, laid out the chain's plans to push $1 items to 40% of all SKUs in the back half of the year.

Where the $1 strategy is working

Dollar General currently offers more than 2,000 items at $1 or less. Of those, 600 sit in its Value Valley aisle — a rotating assortment that outperformed the rest of the store. Value Valley comps rose 16% in Q2, against 3.5% same-store sales for the entire chain.

The retailer also expanded off-shelf displays of $1 items in 9,000 stores, where comp sales outpaced the overall chain.

"We're excited about our plans for an expanded $1 presence in our fall and holiday set in the back half of the year," CEO Todd Vasos said during the earnings call. "We know this price point is important to our customers."

Vasos added that 2027 will bring even more emphasis on the $1 price point.

Why Dollar Tree is betting on flexibility instead

At Dollar Tree, the growth engine looks different. An increase in the average ticket amount and higher "multi-price penetration" fueled a 3.7% bump in comparable sales, CFO Stewart Glendinning noted in the earnings call.

The multi-price approach does not exclude $1 items. CEO Michael Creedon told shareholders: "There's nothing preventing us from maintaining a $1 price point within the assortment."

"Ultimately, multi-price is not about moving away from our heritage," Creedon said. "It's about giving us more flexibility to drive the value, convenience and discovery that has always been our heritage and will always be our heritage."

What the divergence signals for value retail

Both chains posted traffic gains in the same quarter, which suggests bargain hunters respond to price leadership in multiple forms — a single anchor price point or a broader ladder of price points. For Dollar General, the $1 fixturization of 9,000 stores and the Value Valley rotation give it a repeatable merchandising formula it intends to scale into 2027. For Dollar Tree, multi-price raises the average ticket without abandoning the $1 shelf, giving it room to grow basket size as inflation-weary shoppers keep hunting for deals.