Tuesday 21 March 2023

Eggs Are So Expensive That Dollar Tree Is No Longer Selling Them

 Dollar Tree recently pulled eggs from stores as prices for the staple grocery remain elevated.

Dollar Tree, which operates approximately 9,000 locations throughout the United States, said in a statement provided to multiple news outlets that the company will not sell eggs until prices moderate. Family Dollar, a subsidiary of Dollar Tree, will continue to sell eggs.

“Our primary price point at Dollar Tree is $1.25. The cost of eggs is currently very high,” Dollar Tree spokesperson Randy Guiler said, vowing that the discount store will return eggs to shelves when “costs are more in line with historical levels.”

A recent bout of the avian flu has decreased the size of American poultry flocks, raising costs for chicken and turkey while causing a severe increase in egg prices. One dozen large Grade A eggs sold for a national average of $4.20 as of February 2023, according to data from the Bureau of Labor Statistics, constituting a 110% rise from $2.01 in February 2022 and a 163% rise from $1.60 in February 2021.

Headline inflation rose 6.0% between February 2022 and February 2023, according to more data from the Bureau of Labor Statistics, marking a modest decline from the 9.1% year-over-year levels observed in June 2022. Prices for food at home increased at a more elevated 10.2% between February 2022 and February 2023, while costs for food away from home increased 8.4% over the same time horizon.

President Joe Biden nevertheless noted that “annual inflation is down by a third from this summer” in a statement from the White House responding to the data; he failed to mention that inflation is more than three times higher than the 1.4% level observed when he entered office in January 2021. “We will continue to make progress in our fight to build an economy from the bottom up and middle out, not top down,” the commander-in-chief said.

Individuals who purchase from discount stores generally come from lower-income households. Inflation has a greater impact on such families, which typically allocate a greater portion of their monthly income to core living expenses relative to wealthier families.

Dollar Tree announced an increase in its primary price point from $1.00 to $1.25 in November 2021, constituting the first such move in nearly four decades. Diluted earnings per share for the third fiscal quarter, however, increased by 25% between 2021 and 2022.

“Our third quarter sales performance reflects the timely execution of merchandising initiatives to drive our consumables business in this uncertain and inflationary environment,” Dollar Tree CEO Mike Witynski remarked. “Same-store sales for both segments improved from the prior quarter and delivered a sequential monthly improvement throughout the quarter. Shoppers are responding to our new value proposition at Family Dollar and Dollar Tree as we focus on driving both traffic and store productivity.”

Discount stores tend to perform well during recessions and other periods of economic tumult. “The efforts to evolve the assortment to drive consumables performance at Dollar Tree, combined with initiatives designed to improve the value proposition at Family Dollar, are working,” Witynski continued. “We believe we will continue to be part of the solution to millions of households seeking value at a time when they need us most.”

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