Dollar Tree, the national chain of stores that promises everything for a buck, will begin offering items on its shelves that cost as little as $1. will be more than
CHESAPEAKE, Va. – Dollar Tree is embodied in its name by what it means: behind these doors, everything can be had for just $1.
The mantra that the Chesapeake, Virginia, company has held true for decades will only be mostly true now.
After expanding nationwide from only a handful of stores in Georgia, Tennessee, and Virginia, Dollar Tree is breaking the mold and in some places will sell items that exceed the tantalizing $1 grab-n-go price.
Last month the retail chain said rising shipping costs would cut $1.50 to $1.60 from its per-share profits this year. It’s a huge hit for any business, perhaps even more so for one founded decades ago to consistently label itself “Only $1.00 Inc..”
“For decades, our customers have enjoyed ‘thrill-of-the-hunt’ for the value of a dollar – and we remain committed to that core proposition – but many are telling us that when they come Also want a wider product assortment. store,” CEO Michael Wittensky said in a prepared statement.
Raising some prices will certainly give the national chain some flexibility and it is likely to have more variety on its shelves. But a dollar this year won’t buy you what it did in 2020.
Annual inflation in the US reached 4.2% in July, the highest in three decades. And in an appearance before Congress this week, Fed Chair Jerome Powell said price hikes have worsened amid increased supply chains and rising labor costs.
It has affected businesses of every type, perhaps especially one that has kept the line at $1 for decades.
Wittensky said this week that Dollar Tree is a “testing and learning” company, and they will be watching how customers react.
The company began testing higher prices at several hundred of its approximately 8,000 locations in a section of the store called “Dollar Tree Plus”, which can go up to $5. Items that can go from $1.25 to $1.50 will soon be found in the mix in some places among a typical assortment of $1 products.
Analysts at JPMorgan refer to previous conversations with Dollar Tree executives, who cited a significant increase in sales at stores that offer the plus section and if no one else is happy with the change in the top side of $1 at Dollar Tree. If so, so is Wall Street.
Shares of Dollar Tree Inc jumped 13% at the opening bell on Wednesday.
Dollar Tree breaks the $1 barrier, Wittensky said, adding that the company will live up to its promise of value.
“We will continue to fiercely defend that promise regardless of price point, whether it’s $1.00, $1.25, $1.50,” Wittensky said.