Some Dollar Tree items could soon cost more than $1, CEO says. What to know
Dollar Tree customers can expect to pay more for certain items as the national discount chain begins testing some items priced over $1.
The company announced in a news release that it will raise prices at some of its stores and plans to add a variety of “Dollar Tree Plus” products — typically priced between $3 and $5 — to more locations by year’s end.
It’s unclear which items will be affected, however, or when shoppers can expect the price hike at a store near them.
“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,” Dollar Tree CEO Michael Witynski said Tuesday. “Our brand promise is that customers get great value for what they spend at Dollar Tree.”
“We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1, $1.25, $1.50,” Witynski concluded.
The discount chain says it hopes to add 500 Dollar Tree Plus stores — stocked with the more expensive items — by the end of fiscal year, with an additional 1,500 stores planned for fiscal year 2022. The company also has 105 combo stores, which carry both the higher-price Plus products and traditional $1 items, and will add 400 more next year.
“For decades, our customers have enjoyed the ‘thrill-of-the-hunt’ for value at one dollar — and we remain committed to that core proposition,” Witynski said. “But many are telling us that they also want a broader product assortment when they come to shop.”
Some legacy Dollar Tree stores will also test higher prices on unspecified items, the news release said.
The company says it hopes to grow, already boasting 15,000 plus stores across the U.S. and Canada. But like most retailers, it hasn’t been spared from economic impacts of the COVID-19 pandemic.
Rising shipping costs, coupled with supply chain snarls, inflation and labor shortages, have caused hiccups that are expected to last into next year. For the first time, Dollar Tree “reserved dedicated space” on charter boats to ensure its stores remain well-stocked, CNBC reported.
“The Dollar Tree banner is more sensitive to freight costs than others in the industry,” Witynski told investors on an earnings call in August, according to the news outlet.
The chain promises customers $1 deals, meaning it must eat rising costs to keep prices down.
“We recognize the need to make adjustments in the current economic environment,” the CEO told The Wall Street Journal in an interview. However, he said the new prices will “bring a meaningful assortment that over time will have a positive impact on our performance.”
This story was originally published September 29, 2021 at 12:23 PM with the headline "Some Dollar Tree items could soon cost more than $1, CEO says. What to know."