Inflation has pushed dollar stores to rethink their pricing models—and it’s changing who shops there. Dollar Tree began expanding beyond its $1 price point in 2021 due to squeezed margins, leaning into a multi-price strategy that allows for a wider range of products. That shift has made these stores more appealing to higher-income shoppers, who are also feeling the effects of inflation and seeking affordability, but are willing to pay more than $1 for slightly better perceived quality. As Jessie Handbury, associate professor at The Wharton School and a Research Associate at the National Bureau of Economic Research, explains, “The interesting thing is that in the data, we have always seen that … upper middle income people tend to be those who are more likely to take advantage of coupons, sales, just as a more general point… Higher-income people taking advantage of lower prices is not a new thing.” Other discount chains, including Dollar General and Five Below, have also reported growing penetration with higher-income households as the macroeconomic environment pushes consumers to be more value-conscious. With the war in Iran potentially impacting gas prices, further growth for these retailers is possible as consumers look to cut everyday costs.