Dollar Tree announced Tuesday it is raising its prices, bringing the cost of its products over one dollar for the first time in 35 years.
The dollar store will raise its prices by 25%, bringing the cost of its products to $1.25 as customers become accustomed to higher prices across multiple industries, the company announced in its third-quarter 2021 earnings report. Additionally, Dollar Tree said its decision to raise prices is permanent and “not a reaction to short-term or transitory market conditions.”
The company noted that 91% of customers surveyed said they would continue to shop at Dollar Tree with the same or increased frequency despite the price spike.
“We experienced a strong finish to the quarter, as shoppers are increasingly focused on value in this inflationary environment,” company president and Chief Executive Officer, Michael Witnyski, said in the press release.
“Our Dollar Tree pricing tests have demonstrated broad consumer acceptance of the new price point and excitement about the additional offerings and extreme value we will be able to provide. Accordingly, we have begun rolling out the $1.25 price point at Dollar Tree stores nationwide,” Witnyski added.
Keeping prices at $1 would have forced Dollar Tree to stop stocking shelves with multiple products that are popular with consumers, the company said in its earnings report. Additionally, the spike would allow the company to return to its historically high margin range by cutting higher costs.
“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,” Witynski said.
Inflation hit a 30 year high in October, with the Consumer Price Index surging 0.9% on a month-over-month basis and 6.2% compared to the previous year.
Dollar Tree did not immediately respond to the Daily Caller News Foundation’s request for comment.
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