Dollar Tree raises prices to over a buck on many items



Dollar Tree is asking customers to cough up more than a buck for many items in its stores as inflation starts to bite, the mega chain said on Tuesday.

The discounter is testing higher prices in stores, raising some of its prices to as much as $1.50 as its labor costs have soared.

Supply chains that became snarled during the coronavirus also have meant Dollar Tree is paying more for the goods it’s selling — so it’s passing some of those costs onto shoppers at its 7,900 US stores.

“We recognize the need to make adjustments in the current economic environment,” said Chief Executive Michael Witynski. He noted the pressures “all of us” are seeing on wages and freight — not only retailers, but also the companies that supply them.

Meanwhile, adding items beyond its previous $1 price point will allow the chain to expand its selection — creeping perhaps onto the territory of Dollar General, which also started as a dollar store, but now is a broader discounter.

Customers “are telling us that they also want a broader product assortment when they come to shop,” Witynski said in a statement. “Testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs.”

Dollar Tree exterior
Dollar Tree says it will start charging more than $1 for many of the items in its stores as labor costs and freight costs start to bite.
Christopher Sadowski

The Chesapeake, Va.-based company also operates Dollar Tree Plus sections in its stores, which were already charging $3 to $5 for merchandise.

The $1-plus price point will allow the stores to offer more products, including frozen meat or seasonal food, the company said.

But $1 price point has become part of the company’s identity — and name, of course — even as investors have pushed for higher price points over the years. 

Activist hedge fund Starboard Value dropped a 2019 proxy fight at Dollar Tree after the company indicated that it was open to testing higher price points to improve profits. 

Dollar Tree shopper
Raising prices also will allow the chain to offer a wider variety of goods than its $1 limit currently does, Dollar Tree’s CEO said.


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