Many businesses that were not successful before have grown during the pandemic. Their sales have skyrocketed in recent times. One of such businesses is the Dollar Tree store. Dollar Tree General and Dollar Tree are now expanding their business with new store concepts. Also, the shares of the company have reached their 52-week high at the end of 2020. This is a great thing for the store.
During the Covid 19 pandemic, the customers experienced out-of-stock problems. Further, they were afraid to venture near the grocery stores and stand in long lines because of the virus. So, at this crucial time, the Dollars Tree met the urgent needs of the customers. That is why the Dollars Tree Stores have become a hit. Now they are continuing to grow as a result of the pandemic. You can know all the reasons why Dollars Tree Stores are famous during this pandemic here.
Why Dollars Tree is a hit now?
The Dollar General is in the first place and following it is Dollar Tree. The spend per panelist of Dollar General was up by 31% a year from August-November. Also, the spend per panelist of the dollar tree was 22% at the same time. The percentages increased during the pandemic so this shows that there is good growth. If they keep up this momentum then the company will become successful in the market.
What is increasing the sales in Dollar Tree?
The growth of sales is increasing in Dollar Tree because of more shoppers as well as higher spending per shopper. During the early pandemic, people did not know from where to get supplies. Everything was vanishing from the shops quickly so many shops were out of products. So, everyone was in a state of panic. That is why lots of customers searched for alternatives.
At this time Dollar Tree saw a huge spike in its sales. When many popular stores ran out of toilet paper the customers got the items, they needed from Dolla Tree Stores. They also brought a lot of things from the shop to stock up in their home. Then when the pandemic panic subsided people started to return to the normal life but they did not forget the Dollar Tree. So, the shop was able to retain all its new customers. The transaction volume as well as the basket size of Dolla Tree became stable.
Who is buying from Dollar Tree?
At first, the number of new customers in Dollar Tree was low. But during the pandemic, many new customers came to buy from Dollar Tree. Yet the existing customers are larger in number than the new customers. They have increased their spending too. That is why they have driven the sales high. Also, many high-income customers have become frequent customers of the shop.
Which competitors lost their customers to Dollar Tree?
During the pandemic, many shops lost their customers to Dollar Tree. But Dollar Tree has only slightly outperformed the stores like Walmart and Target that boasts lots of customers with high spending power. On the other hand, Dollar Tree can compete with these mass retailers as it saw a +6ppt increase in the win rate when pitted against Target. This is proof that Dollar Tree has come to a position to stand in the same line as large stores like Target and Walmart. It is a big achievement for this once unsuccessful store. Many customers now have chosen Dollar Tree as their alternative store. So, this is indeed a success.
Conclusion
Dollar Tree has become a popular store during the pandemic. The above reasons show that the shop has certainly become a hit during the pandemic.
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