Dollar Tree Inc. has based its entire brand on every item priced for a dollar or less across its nearly 16,000 retail stores across 48 states and five Canadian provinces. But with logistical costs soaring, persistent labor shortages, and the cost of everything rising, the company announced it would begin selling items for more than $1 in its Dollar Tree Plus and Dollar Tree stores. Some things could cost as much as $5.
"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 $1.00, $1.25, $1.50," CEO Michael Witynski said.
By year-end, at least 500 Dollar Tree Plus stores will be offering an assortment of items priced at $1, $3, and $5. The goal is to bring widespread price increases to thousands of stores across North America from 2022 through 2024.
"For decades, our customers have enjoyed the 'thrill-of-the-hunt' for value at one dollar — and we remain committed to that core proposition — but many are telling us that they also want a broader product assortment when they come to shop," Witynski said.
He continued: "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."
Higher prices points are mostly due to snarled supply chains (DHL and UPS have warned about disruptions), a tight labor market, and inflation pushing costs higher. Dollar Tree Plus sounds like a fitting name to rebrand its 15,865 stores across North America.
Dollar Tree - a company whose entire brand is based on every item priced $1 or less - announced they're raising prices above $1 on "selected items" at all stores (not just DT Plus).— Ben Hunt (@EpsilonTheory) September 29, 2021
If you don't see that inflation is embedded in general prices, you're just not paying attention. pic.twitter.com/REmGltjplZ
More fundamentally, President Biden's "build back better" strategy of trillions of dollars in fiscal and monetary support has unleashed an inflation monster that the White House and the Federal Reserve have insisted for months that it's merely "transitory."
Dollar Tree raising its price above a buck doesn't sound "transitory" to us but somewhat permanent.