Dollar Tree thrives as Americans hunt for bargains

Dollar Tree is winning big as Americans hunt for cheap, feel-good bargains. The retailer delivered one of its strongest quarters in years, posting 9.4% sales growth to nearly $5 billion. 

Same-store sales rose over 4%, fueled by a 4.5% jump in average ticket size, even as retail traffic stagnates elsewhere. It reported that 3 million more households shopped in the third quarter than last year.

Shoppers are embracing Dollar Tree’s growing discretionary mix, which now makes up just over half of total sales, giving stores a stronger “treasure-hunt” identity.

This year’s Halloween was a record event, powered by the chain’s expanding multi-price strategy, which featured $3, $4, and $5 items alongside its $1.25 base price.

That shift boosted gross margins by 40 basis points to nearly 36%, helping Dollar Tree raise its full-year profit outlook. 

The trade-down trend, which began in 2022 amid high inflation, continues to benefit Dollar Tree and rivals like Dollar General and Walmart. 

After years of operational and financial setbacks, the company is finally regaining momentum. 

As Americans trade down and search for value, Dollar Tree stands out as a retailer thriving in a stressed consumer economy.