Dollar Tree Sales Bounce in Sign of Dollar Stores’ Renewed Vigor

Things were not looking good for dollar stores in the U.S. a few months ago — especially Dollar Tree — but now it seems the tide has turned.

Dollar Tree released its second-quarter earnings on Wednesday, reporting $4.6 billion in net sales for the second quarter, a 12.3 percent increase from the same period last year, and a gross profit of $1.6 billion, a 12.9 percent increase, according to the company. This was largely driven by a 3 percent increase in foot traffic during the period.

The increase in earnings came after Dollar Tree announced in March it was selling off its Family Dollar chain of stores to private equity firms Brigade Capital Management and Macellum Capital Management for just over $1 billion, as Commercial Observer previously reported. That transaction closed in July.

Overall visits to Dollar Tree stores were up 12.6 percent year-over-year during the second quarter, while same-store visits rose 8 percent, according to a recent report from foot traffic tracker Placer.ai.

The success comes as a bit of a surprise, especially after years of mismanagement and financial struggles caused Family Dollar to close nearly 1,000 stores last year. Add on competition from big-box retailers, inflation and shoplifting, and things weren’t looking great. So what changed?

“Dollar store chains have seen a lot of success in 2025 due to their inherent focus on value, which is a cornerstone of today’s shopper’s needs,” Elizabeth Lafontaine, director of research at Placer.ai, said in a statement to CO. “Some big-box shoppers have traded down to dollar stores due to their low prices and expanded assortments.

“Consumers are willing to shop around to find the best deals, which often means that dollar store chains are now in consideration more frequently,” Lafontaine added. “In many areas, dollar stores’ expansion into a new market provides an alternative to big-box retailers that consumers may not have had access to before.”

Placer.ai also said Dollar Tree is now “large enough” to perform alongside superstores like Walmart, Target and Costco — stores which previously posed the biggest competition to dollar stores due to their wider variety of products and bulk buy options.

But now it seems like dollar stores have found their footing, as they’re appealing to middle-income consumers who are most interested in getting the best and cheapest deals and spending a minimal amount of money.

“Looks like shoppers figured out the new financial realities well before the Street did,” Kate Newlin, a retail brand consultant and president of Kate Newlin Consulting, told CO. “Real people understand the squeeze they are living through and that they need to focus and prioritize to cope.

“Perhaps Dollar Tree’s urban and suburban walkable, bike-able, errand-on-the way to/from picking up the kids locations takes on greater value when contrasted with the ‘Gotta drive there and spend an hour’ and hundreds of dollars or so at Walmart and walking its massive parking lot,” Newlin added. “These numbers argue in favor of serious economies of time and money for consumers feeling the stress most keenly.”

Between January and July of this year, overall visits to Dollar Tree were up almost 44.2 percent compared to the same period in 2019, according to Placer.ai. Plus, average visits per location are up 1.1 percent.

Also during the second quarter, Dollar Tree opened 106 new stores across the country and converted approximately 585 stores to its “3.0 multi-price format,” which moves away from its traditional fixed $1.25 price point to a merchandising model with products priced at up to $7, according to the earnings report.

“The strong sales growth, margin outperformance and market share gains that Dollar Tree delivered in the second quarter against an increasingly challenging economic backdrop reinforces the unique position that Dollar Tree occupies in today’s retail landscape,” Dollar Tree CEO Mike Creedon said in a statement.

“With the Family Dollar sale complete, Dollar Tree is now a fully focused business, and every ounce of our leadership attention, capital investment and operating resources is now directed toward strengthening the Dollar Tree brand,” Creedon added.

Meanwhile, Dollar Tree’s discount competitor Dollar General is also experiencing growth. Dollar General reported a 12.2 percent visitor increase between July 2023 and July 2024, though its growth slowed to 2.9 percent year-over-year in July, according to Placer.ai.

Dollar General still remains the larger of the dollar store chains, with 58.7 percent of combined visits to both Dollar General and Dollar Tree going to Dollar General during the first half of 2025, according to Placer.ai.

While dollar stores seem to be doing considerably better, they still have a long way to go to recover from years of store closures and financial struggles, in addition to steady competition from e-commerce and online marketplaces such as Amazon and even Temu.

But, as more Americans experience financial stress, see their credit card balances rise, and feel the cuts from government benefits, they might be pulling up to a Dollar Tree instead of a Walmart for the time being.

Isabelle Durso can be reached at idurso@commercialobserver.com.