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- Dollar General is adding more $1 items to its stores, executives said Thursday.
- The dollar store chain plans to increase its $1 selection by 40% in time for the holidays.
- Dollar General is doubling down on the price point after second-quarter sales success
Dollar General is doubling down on the $1 price point.
A selection of 600 items priced at $1 each, which the chain calls “Value Valley,” had comparable sales growth of 16% during the company’s second quarter — a much faster clip than broader same-store sales growth of 3.5%, it said on Thursday.
In total, Dollar General stocks about 2,000 items that cost $1 each. It expects to grow that number by 40% in the second half of 2026 in time for the holiday shopping season, COO Emily Taylor said on the retailer’s earnings call.
Expect that selection to grow “even more so into 2027,” CEO Todd Vasos said. “We have got real plans to expand that $1 price point to offer even more value for the consumer,” he added.
Dollar stores used to be true to their name, with everything on their shelves priced at $1. Inflation has changed that, though: In 2021, Dollar Tree raised prices on most items to $1.25 and has since experimented with items priced at several dollars each.
That’s a different direction than Dollar General appears to be taking, said Arielle Feger, a senior analyst at EMARKETER, Business Insider’s sister company.
While Dollar General has long sold items that cost well over $1 each, many of those items are food and other consumables that draw people into the store, Feger said. The chain began adding freezers stocked with food items priced at $1 each to its stores earlier this year, Vasos said on the company’s last earnings call in June.
Dollar Tree’s $1 item selection, by contrast, skews more toward discretionary items, such as home decor and toys.
Dollar General’s strategy is similar to the classic grocery store strategy of selling eggs and milk as cheaply as possible — even at a loss, potentially — to boost overall sales, Feger said.
“It gets people in the door, and it gets them to continue to come back,” she said.
That strategy is particularly meaningful to customers who are trying to save money, Vasos said on Thursday’s earnings call.
Dollar General’s average customer is “still gainfully employed” and “is seeing some gains in her income levels,” the CEO said. But inflation and rising gas prices this year have offset that income gain, Vasos said, leading many customers to visit its stores more often and buy less each trip.
By expanding its selection of $1 items, Dollar General will likely continue to attract customers, Feger said.
“Consumers are habitual,” she said. “We go to the same places, we expect the same things.”
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