Dollar Tree stops selling eggs because they are too expensive

New York (CNN) Eggs have become too expensive for Dollar Tree.

Money tree (DLTR)which sells most products for $1.25 and a small selection of items 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 risen, fueled by supply shortages due to the deadly avian flu, high production costs and egg producers increasing their own profits.

The cost of eggs was up 38% annually for producers and 55% for customers in February, even though eggs are starting to get cheaper. The average price for a dozen large grade A eggs was $4.21 in February, according to data from the Bureau of Labor Statistics.

Most retailers have raised egg prices for customers to adjust to higher costs, but Dollar Tree doesn’t have as much flexibility to raise prices.

“Our primary price at Dollar Tree is $1.25. The cost of eggs is very high right now,” said a company spokesperson. Randy Guller. Dollar Tree, which has about 9,000 U.S. stores, will bring back eggs when “costs are more in line with historical levels.”

But that probably won’t be in time for a major egg-buying holiday, Easter, which falls on April 9 this year.

Reuters first reported that Dollar Tree would stop selling eggs. Family Dollar, owned by Dollar Tree, continues to sell eggs.

Shoppers on tight budgets are increasingly turning to dollar stores for food.

Dollar Tree, Family Dollar, and Dollar General, the largest of the three chains, have spread out in recent years and added more staples, though fresh and healthy options are limited. Dollar stores are the fastest growing food retailers in America, according to a Tufts University study released this year.

Dollar Tree sold cartons of eight or six eggs for $1. In 2021, Dollar Tree announced it would raise prices to $1.25 as selling everything for $1 put a strain on things.

Dollar Tree also made the decision to pull eggs because it has a lean staffing model in stores, said David D’Arezzo, a former executive at Dollar General and other retailers who now works as an industry consultant. Employees changing price tags on eggs every week to account for wild swings in the market would put additional strain on store operations, he said.

The chain targets low- and middle-income customers and doesn’t want to offer eggs at bargain prices to damage its price reputation with shoppers, D’Arezzo said.

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