Dollar Tree Inc. announced on Nov. 23 that most of its products will soon cost $1.25, a change that is not in response to “short-term or transitory market conditions,” the company said in a news release.
Instead, the permanent change in pricing will allow the chain to “expand its offerings, introduce new products and sizes, and provide families with more of their daily essentials,” the company said.
The company also hopes that the new prices will mitigate “historically-high merchandise cost increases, including freight and distribution costs,” and bolster higher operating costs, such as wage increases, the release said.
The decision marks the end of an era for Dollar Tree stores — the company said in the release that its stores have sold most of their products for $1 or less for 35 years, even through previous inflationary periods.
The company initially began testing elevated prices earlier this year. It started by announcing plans to offer more products at prices above $1 at Dollar Tree Plus stores in September 2021 and then extended the prices to a selection of legacy Dollar Tree stores, the release said.
The results were “overwhelmingly positive,” with 91% of customers surveyed saying they would continue to shop at Dollar Tree stores with the same or increased frequency, the company said.
As a result, Dollar Tree is focusing on “aggressively executing its plan to roll out the new price point,” with goals to introduce the new pricing in 2,000 additional legacy stores by December and to extend the new pricing to all stores by the end of the first fiscal quarter of 2022, or by the end of March.
In September, the company announced plans to open 500 Dollar Tree Plus stores by the end of the fiscal year, as well as an additional 1,500 stores by the end of fiscal year 2022. The company also plans to add 400 more combo stores, which have carried a mix of higher-priced Plus items and traditional $1 items, next year, McClatchy News reported.
Michael Witynski, president and CEO of the company, said the new price point “represents a monumental step” for the chain.