A dollar just isn’t worth what it used to be. Most of us have heard that sad truth our entire lives. However, current levels of inflation have caused the dollar to rapidly drop in value. Many people are seeing that happen every time they take a trip to the store. But, one store has been a haven for those shopping on a budget. For years, Dollar Tree has kept its prices at $1 or less.
Now, in the face of the current rate of inflation, Dollar Tree is raising its prices, according to an AP report. The Virginia-based retail chain cites rising shipping costs for its decision as well. The pandemic hampered supply chains. Currently, things are going back to normal and demand for products is growing. However, supply chain workers are in short supply which is causing higher prices at the register. In fact, some larger chains are currently hiring tens of thousands of new supply chain employees to mitigate this.
Dollar Tree shoppers are going to see some of that cost at the register. Some items on the store’s shelves will stay the same. However, others might go up to $1.50 or more.
On the other hand, inflation and supply chain costs aren’t the only things that are bringing prices up at Dollar Tree. Many of the chain’s loyal customers want to see more variety in the store. That variety is going to cost them.
In a statement, Dollar Tree CEO Michael Witynski said, “For decades, our customers have enjoyed the ‘thrill of the hunt’ for value at one dollar – and we remain committed to that core proposition – but many are telling us they also want broader product assortment when they come to shop.”
The extra profit from higher prices will help Dollar Tree have the buying power to put more items on its shelves.
Dollar Tree Sees Success with Higher Prices
Some of the retail chain’s locations already have items that cost more than a buck. In fact, several hundred of their locations feature a section called “Dollar Tree Plus.” That section contains items that cost up to $5. Shoppers seem to like this pricier section in the discount store. According to the AP report, J.P. Morgan analysts talked to top-level execs for the chain. Those executives said they saw “a significant sales boost,” in the stores with the “Plus,” section.
Even if some shoppers aren’t happy about higher prices at Dollar Tree, Wall Street is taking notice in a big way. When the market opened today, shares of the retail chain were up 13%.
Witynski said that the retail chain may be raising its prices. However, they will not shy away from Dollar Tree’s promise of value. “We will continue to be fiercely protective of that promise, regardless of the price point.”