Dollar Tree is raising prices above $1 on certain items across select stores, the company announced Tuesday.
Supply chain slowdowns and rising freight costs have impacted the retailer’s ability to profit while keeping prices at $1 across the board. As such, Dollar Tree’s latest price change announcement represents a response to the current economic environment, Dollar Tree CEO and president Michael Witynski told The Wall Street Journal.
The value chain will add higher-priced items in Dollar Tree Plus stores and in certain Dollar Tree stores. The retailer first tested Dollar Tree Plus in stores in 2019, offering items priced at $1, $3 and $5.
“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 that they also want a broader product assortment when they come to shop,” Witynski said in a statement. “We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs.”
In addition to raising some prices, Dollar Tree is also ordering products earlier than usual and securing space on chartered shipping vessels to ensure product arrives in stores.
Amid widespread store closures, dollar-store chains are opening stores at a rapid rate. According to a recent report from Coresight Research, companies including Dollar Tree, Dollar General and Family Dollar have announced that that they will open a collective 1,626 new stores. That’s out of a total 4,799 of announced store openings in 2021 so far, compared with the 3,597 announced in May.
Dollar Tree, which also owns Family Dollar, is on track to have 500 Dollar Tree Plus stores by the end of fiscal year 2021 and plans to open at least 5,000 Dollar Tree Plus stores by the end of fiscal year 2024.
To remain competitive in the challenging current hiring market, Dollar Tree has increased its pay in some locations and is offering workers a sign-on bonus at certain hiring events.
The success of these discount chains highlights a consumer attraction to discount and low-price stores, in part due to high levels of unemployment and a general spending hesitancy from the pandemic.
“Our brand promise is that customers get great value for what they spend at Dollar Tree,” Witynski said. “We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50.”