Dollar Tree won’t be changing its name, but it will be changing its prices. As indicated in September, everything in Dollar Tree will no longer be just a dollar. By the end of the first quarter of 2022, it will raise prices from $1 to $1.25 on the majority of its products in all stores. The company said this decision is permanent.
The discount chain kept its prices stable through the pandemic, but officials said it will need to move away from its everything-for-one-dollar pricing model to stay afloat.
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The price hike will help the company handle rising costs for distribution and give it the ability to pay higher wages.
“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” stated Michael Witynski, President and Chief Executive Officer. “Guided by Dollar Tree’s same founding principles, we will be relentless in our commitment to offer our customers the best value possible.”
What Dollar Tree fans can expect going forward
The new $1.25 price point will be on most of Dollar Tree’s items. The company said adding that extra quarter will allow it to expand its offerings, introduce new products and sizes, and provide families with more of their daily essentials — most likely food items.
The company also stated that many of the items it cut back on because of the constraints of the $1.00 price point will return.
Dollar Tree fans in rural communities can also expect something positive from the company. Earlier this year, plans were confirmed for a major expansion of a new concept store that combines its namesake and Family Dollar banners into a single storefront at 3,000 locations across the U.S.
The company says consumers should be ok with the change
While costs may be the leading factor in Dollar Tree’s move, it said it didn’t go into this blindly. When the company first announced the likelihood that it was moving in this direction, it fielded a test-and-learn study in selected legacy Dollar Tree stores and said it was “very encouraged” by the positive feedback customers offered and how those stores performed during that trial.
“When surveyed, 77% of shoppers indicated they were almost immediately aware of the new price point when visiting the store,” the company said in its Third Quarter Fiscal 2021 financial overview reports Consumer Affairs.
“Additionally, 91% of those surveyed indicated they would shop Dollar Tree with the same or increased frequency. Many have also indicated they are seeing price increases across the market and that Dollar Tree is still providing the products they need at an undeniable value. As key traffic-driving products are reintroduced, the Company is confident that customers will be extremely pleased with the even greater value they will discover on store shelves.”