Whenever you’re on a budget, places like the 99¢ store, 98¢ store and Dollar Tree always come in clutch. Although 99¢ stores and similar under dollar places are sometimes misleading, since many items sold there are more than $1, Dollar Tree always kept their product prices at exactly $1.
The price-friendly franchise that has grown favor with customers, providing dollar-only items, is now changing up the flow and increasing their fees beyond that. Dollar Tree announced that they will be increasing some of their products to $1.25 and $1.30, as well as pricing some items between $3-5 on September 28.
Movement toward increased pricing by the affordable brand continues after a successful test run of the company’s new store and combo format, Dollar Tree Plus. Dollar Tree Plus, a forthcoming section at various store locations, will have assorted items priced at $3 or $5 alongside the traditional $1 products, according to Dollar Tree’s news release.
Growing prices by the dollar-only company was not spontaneous, however was due to a push from Wall Street. For years the brand has been pressured to raise prices, and in 2019—after an “activist investor” took stake in the business and pressed for price increases—the company complied. Each party settled after the budget-friendly business agreed to test different prices, according to CNN Business.
The franchise raising their cost will enable them to broaden their product line, thus becoming a better brand for customers.
“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, Dollar Tree President and CEO Michael Witynski said in a press release. “ 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.”
Despite the price slightly rising for the brand, the franchise promises to remain faithful to customers, ensuring customers will still get their bang for their buck.
“Our brand promise is that customers get great value for what they spend at Dollar Tree,” Witynski said. “We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50.”
While the low-cost store’s price change isn’t too excessive, some consistent patrons aren’t too excited about their products exceeding more than $1.
“I literally go to Dollar Tree because EVERYTHING in there is suppose to be $1 not $2 or even $5. Like what in the Dollar General is this nonsense,” someone tweeted.
In the long run, the price raise will help the company maneuver better during inflation.
As noted by CNN Business, “While the $1.00 price point has been devoutly maintained for decades, inflation is likely to remain higher for longer forcing the tough but necessary decision to adapt the model,” Michael Montani, a retail analyst at Evercore ISI, said in a note to clients. Higher prices will help Dollar Tree manage “margin pressure from inflation.”
Luckily, President Biden raising minimum wage will enable customers to be able to afford the company’s slightly higher prices.