The price of eggs has risen beyond what Dollar Tree can afford.
In order to save money, Dollar Tree (DLTR), which typically sells items for $1.25 and a small selection of items for $3 or $5, has decided to stop selling eggs in stores.
Due to dwindling supplies brought on by the deadly avian flu, rising production costs, and increased profits on the part of egg producers, egg prices have skyrocketed.
Despite gradual declines, the price of eggs increased by 38% for producers and 55% for consumers year over year in February. According to numbers from the BLS for the month of February, a dozen large Grade A eggs cost an average of $4.21.
To offset rising costs, most stores have increased the price of eggs to consumers, but Dollar Tree is in a more precarious position.
Why Dollar is not selling eggs anymore?
At Dollar Tree, $1.25 is where we make most of our money. Egg prices are extremely high right now, according to Randy Guiler, a spokesman for the company. As soon as “costs are more in line with historical levels,” Dollar Tree, which operates in roughly 9,000 locations across the United States, will once again stock eggs.
However, that probably won’t be ready in time for Easter, which falls on April 9 this year, a major egg-purchasing holiday.
First reported by Reuters, Dollar Tree has decided to stop selling eggs. Eggs will still be available for purchase at Family Dollar, which is now part of Dollar Tree.
Dollar stores have become a popular food source for shoppers on a tight budget.
The three largest discount retailers, Dollar Tree, Family Dollar, and Dollar General, have expanded in recent years and added more food basics, but fresh and healthy options remain scarce. According to research from Tufts University published this year, dollar stores are the fastest-growing food retailers in the United States.
Once upon a time, you could buy a pack of eight or six eggs at Dollar Tree for just a buck. When it became clear that the $1 price point was squeezing business, Dollar Tree announced in 2021 that it would be raising prices to $1.25.
According to David D’Arezzo, a former executive at Dollar General and other retailers who are now working as an industry consultant, Dollar Tree also made the decision to pull eggs because it has a lean staffing model in stores. It would be too much of a hassle for the store’s operations if employees had to change the price tags on eggs every week to reflect the erratic market.
According to D’Arezzo, the chain doesn’t want to offer eggs at sticker shock prices because it would hurt its price reputation with shoppers.