Dollar Tree will raise prices for most items in all of its stores to $ 1.25 from $ 1 by the end of April, the company said Tuesday after successfully testing a new pricing strategy.
“For 35 years, Dollar Tree has managed to maintain the ‘one dollar’ philosophy during inflationary periods,” the company said in a statement accompanying its quarterly financial statements, but felt it was high time to raise prices. “This decision is permanent and is not a response to short-term or transient market conditions,” he added.
The dollar store giant said the price hike, which it first announced testing in September, would help lower shipping and distribution costs, as well as raise wages, and allow it to return some products it could no longer offer for $ 1. He said 91 percent of customers surveyed said they would continue to shop at Dollar Tree after the change.
Dollar Tree shares are up more than 11 percent since the announcement. The company operates nearly 16,000 stores in the United States and Canada.
Dollar stores are grappling with slowing sales and shrinking profits. Walmart and other retail giants also said supply chain problems and labor costs are driving up costs, but the rise in costs is largely offset by increased sales.