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The company — one of America’s last remaining true dollar stores — said Tuesday it will increase the prices of most products from $1 to $1.25 by the first quarter of 2022. The change is a sign of the pressures low-cost retailers face. prices during a period of rising inflation.
Strictly selling stuff for $1 hampered Dollar Tree, the company said, forcing it to stop selling some “customer favorites.” Raising prices will give Dollar Tree more flexibility to reintroduce those items, expand its selection, and bring new products and sizes to its stores.
Dollar Tree also said rising prices will help the company increase its profit margins by “reducing historically high price increases for goods,” including freight and distribution costs, as well as wage increases.
“Now is the right time to move away from the restrictions on the $1 price,” CEO Michael Witynski said in a statement.
The End of the Dollar Stores
Dollar Tree primarily transports seasonal items, toys, stationery, home accessories, kitchenware and party favors.
Dollar Tree has sold products for $1 for 35 years and was the last of the major dollar store chains to actually be a dollar store. (The company was called “Only $1.00” in the late 20th century, before changing its name to Dollar Tree in 1993.)
Dollar Tree had begun to move away from just offering goods for $1 in recent years, partly in response to pressure on Wall Street to raise prices. Dollar Tree is lagging behind Dollar General and other discount chains.
In 2019, an activist investor took a stake in the company and pressured the chain to raise prices. The group ended their fight after Dollar Tree announced it planned to test several prizes.
While Dollar Tree said its decision to raise prices permanently was not a response to short-term inflation, one analyst was unconvinced.
“The pace of the rollout, along with [the] committed investor, Mantle Ridge, is clearly suggesting otherwise,” Kelly Bania, an analyst at BMO Capital Markets, said in a note to clients on Tuesday.
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Sources 2/ https://www.cnn.com/2021/11/23/investing/dollar-tree-prices-inflation/index.html The mention sources can contact us to remove/changing this article |
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