North American discount chain retailer raises prices 25% amid inflation

Dollar Tree points to high merchandise, freight, distribution, operating costs

North American discount chain retailer Dollar Tree announced Tuesday it will raise prices on goods by 25% as low-cost stores continue to struggle due to record-high inflation.

Dollar Tree, which has almost 16,000 stores in the US and Canada, will increase prices from $1 to $1.25 in over 2,000 stores in December. The price increase will include all stores by the end of the first quarter of 2022.

The company said its pricing tests “demonstrated broad consumer acceptance of the new price point,” in its financial results statement for the third quarter of 2021.

“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,” it added.

Previously named as “Only $1.00” until 1993, Dollar Tree has adopted “everything-for-one-dollar” strategy for 35 years, and said its latest decision is “not a reaction to short-term or transitory market conditions.”

The retailer, however, pointed to historically-high merchandise costs, including freight and distribution, in addition to higher operating costs such as wage increases.

“The additional price point at Dollar Tree affords us greater flexibility to manage the overall business, especially in a volatile, inflationary environment, while driving customer loyalty and store productivity,”President and CEO Michael Witynski said in the statement.


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