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Dollar Tree Permanently Raises Prices for Most Items to $ 1.25

In this Feb. 25, 2021 photo, Dollar Tree store logos indicating that everything in the store is for $ 1 are promoted on its storefront in Jackson, Mississippi. The national chain will increase the price of most of its products to $ 1.25. (AP Photo / Rogelio V. Solis)

CHESAPEAKE, Va. (WAVY) – Dollar Tree will now permanently sell most of its traditionally $ 1 items for $ 1.25, the company said in its third quarter report to investors on Tuesday, after sticking to it mostly one dollar since the company opened in 1986.

It’s a big step for the Virginia-based retailer, but one that has been in the works for some time.

While the United States has had to contend with high inflation and rising transportation and distribution costs, Dollar Tree says the move is “not a reaction to short-term or transient market conditions” and that it was time to move on from the constraints of the $ 1 price level.

“For 35 years, Dollar Tree has weathered periods of inflation to maintain the all-for-one dollar philosophy that sets Dollar Tree apart and has made it one of the most successful retail concepts for three decades,” the company said in a statement.

Dollar Tree announced in September that it plans to raise prices and is already testing higher prices in several hundred of its 8,000 stores with positive customer reviews. It has also increased the offers in its “Dollar Tree Plus” section which includes items up to $ 5.

It plans to roll out the $ 1.25 price point to more than 2,000 additional legacy stores in December, with the remainder by the end of the first quarter of 2022.

The company says the price increase will allow more options for merchandise in-store and allow the return of some items that have been discontinued as the company faces competition from other retailers.

CEO Michael Witynski also said the changes will allow the company to return to its traditionally high profit margins of 35% to 36% by next year. Investors had pushed the company to raise its prices.


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