At Dollar Tree on Abrams I purchased a hard cover book called “The Resurrection of Joan Ashby” by Cherise Wolas (I highly recommend), list price $27.99. It was $1. Prone to headaches, I buy 24-count knock-off Excedrin at Dollar Trees across Dallas. (There are 20, by my count). That’s $1. For Thanksgiving, I grabbed a Marie Callender’s pie at Kroger Wynnewood, which I transferred into the next-door Dollar Tree’s pan and will pass the dessert off as my own (I am this confident my family doesn’t read me). The pie was $6.99. The pan, you guessed it. $1.
For 35 years Dollar Tree had delivered on its eponymous price.
However, in its September announcement, Dollar Store execs say now is the time to shift away from the constraints of its everything-for-a-dollar philosophy “in order to continue offering extreme value to customers.”
We’re now looking at a $1.25 price point.
“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,” Dollar Tree CEO Michael Witynski says in the statement.
Thanks a lot, Biden.
Just kidding. While some news organizations jumped at the chance to blame Dollar Tree’s expected $.25 increase on the current administration’s policies, the company assured in its statement, “This decision is permanent and is not a reaction to short-term or transitory market conditions.”
That said, the decision does come amid rising fiscal tensions as supply chain bottlenecks force prices to spike nationwide — the Labor Department reported this month that annual inflation is at a 30-year high.
Dollar Tree says the new price will enable it to “return to its historical gross margin range by mitigating historically-high merchandise cost increases, including freight and distribution costs, as well as higher operating costs, such as wage increases.”
The company tested elevated prices back in September and polled customers about it.
When surveyed, 77% of shoppers indicated they were almost immediately aware of the new price point when visiting the store. Additionally, 91% of those surveyed indicated they would shop Dollar Tree with the same or increased frequency.
“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,” according to the news release.
Some Dollar Trees have already added $5 isles. (At Wynnewood it will soon be competing with a Five Below.)
Witynski has said the “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.”