The Buck Stops Here: Dollar Tree Raises Prices to $1.25

(NEW YORK) — Faced with the rising cost of goods and freight, discount retail chain Dollar Tree said Tuesday it will be raising its prices to $1.25 for the majority of its products.

Dollar Tree said the reason for raising its prices to $1.25 was not due to “short-term or transitory market conditions” and said the price increases were permanent. It stated that the higher prices would allow it to deal with both high merchandise costs and higher operational costs such as wages.

“(Dollar Tree) believes this is the appropriate time to shift away from the constraints of the $1.00 price point in order to continue offering extreme value to customers,” the company said in a statement.
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Dollar Tree was one of the last true “dollar stores” after most of its competition had moved away from that price point.

Company, based in Chesapeake (Virginia), stated in September that it had begun testing higher prices in select locations. The company announced on Tuesday it will increase the price at more than 2000 Dollar Tree locations in December. It also plans to complete its rollout of the prices in all other stores early next year. There are approximately 8,000 Dollar Tree locations.

Michael Witynski CEO stated that Dollar Tree customers should remain loyal.

Its shoppers “believe that at $1.25, it’s still going to be an undeniable value because of what they’re seeing out in the marketplace,” Witynski said on a call with industry analysts. “And they know that Dollar Tree hasn’t raised its price in 35 years, so they’re giving us credit.”

The company’s stock rose 9.2% on Tuesday following the announcement, which was paired with the company’s quarterly earnings. Analysts at Citigroup called the earnings “disappointing” but said investors are looking past earnings to the company finally raising prices.


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