Dollar Tree will increase prices by $ 1 to $ 1.25 on most of its products by the end of April, the company said on Tuesday.
Why is this important: Dollar Tree, which has been selling $ 1 products for 35 years, was one of the last of the major U.S. dollar store chains to keep its price tag of $ 1. The change reflects the pressure on low-cost retailers amid rising inflation, CNN notes.
- For decades, Dollar Tree has turned to cheap products – and very low costs to get them to stores – to deliver the $ 1 price that some communities rely on, writes Courtenay Brown of Axios.
Details: Keeping prices at $ 1 has forced Dollar Tree to stop selling some customer-favorite products, the company said.
- The $ 1.25 price will allow Dollar Tree to “return to its historic gross margin range by mitigating historically high increases in commodity costs, including transportation and distribution costs, as well as higher operating costs. high, such as salary increases ”.
- The company said 91% of buyers surveyed during the initial testing phase indicated that they would buy from Dollar Tree with the same or increased frequency.
- The decision is permanent and not a “reaction to short-term or transient market conditions”.
What they say : “The lifting of the dollar constraint represents a monumental milestone for our organization and we are excited about the opportunity to significantly improve the experience for our buyers and unlock value for our stakeholders,” said President and CEO Michael Witynski said in a statement.