Dollar Tree can no longer afford to sell eggs

CNN – Eggs have become too expensive for the dollar tree.

Dollar Tree, which sells most items for $1.25 and a small selection for $3 or $5, will stop selling eggs in stores because the company can’t make money by offering them at fixed prices.

Egg prices have soared due to shortages caused by deadly bird flu, high production costs and increased out-of-pocket profits for egg producers.

In February, the price of eggs rose by 38% year-on-year for producers and by 55% for buyers, although eggs are starting to become cheaper. According to data from the Bureau of Labor Statistics, the average price for a dozen large grade A eggs in February was $4.21.

Most retailers have raised prices on eggs for customers to adjust to higher costs, but Dollar Tree doesn’t have the flexibility to raise prices.

“Our base price at Dollar Tree is $1.25. Egg prices are very high right now,” said company spokesman Randy Giller. Dollar Tree, which has about 9,000 stores in the U.S., will bring back the eggs when “costs are more in line with historical levels.”

But it probably won’t be in time for the key egg-buying holiday, Easter, which falls on April 9 this year.

Reuters first reported that Dollar Tree would stop selling eggs. Family Dollar, which is owned by Dollar Tree, will continue to sell eggs.

Shoppers on a tight budget are increasingly turning to dollar stores for groceries.

Dollar Tree, Family Dollar and Dollar General, the largest of the three chains, have expanded in recent years and added more staple foods, though fresh and healthy options are limited. According to a Tufts University study released this year, Dollar stores are America’s fastest-growing grocery retailer.

Dollar Tree used to sell boxes of eight to six eggs for $1. In 2021, Dollar Tree announced it would raise prices to $1.25 because selling for just $1 was squeezing business.

Dollar Tree also made the decision to pull the eggs because the stores have a lean staffing model, said David D’Arezzo, a former executive at Dollar General and other retailers who now works as an industry consultant. He said the workers, who change the price tags for eggs every week in view of the sharp fluctuations in the market, will be an additional burden on the operation of the stores.

The chain caters to low- and middle-income customers and doesn’t want to offer eggs at shock prices to hurt its value reputation among shoppers, D’Arezza said.

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