Customers walking into a Dollar Tree store reasonably expect items to cost $1. It’s right there in the name, after all. But rising shipping costs thanks to the pandemic have the chain raising prices on some grab-and-go items to $1.25 or $1.50.
“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,” CEO Michael Witynski said in a statement announcing the changes. “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.”
Several hundred of the 8,000 nationwide locations already are branded Dollar Tree Plus, with items going for as much as $5. Now, all stores will have at least something that sells for more than $1.
Whatever the cost of an item, Dollar Tree will keep delivering the value loyal customers have come to expect, 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,” he said.
Dollar Tree shareholders, who had heard earlier that shipping costs might eat into $1.50 per share of profit, were happy at least, as the stock went up 13% Wednesday on the news.
“We are a ‘test-and-learn’ organization which is what we are doing with this new initiative. We listen to our customers and believe it will make shopping with us an even better experience,” Witynski added. “Our merchants have proven that they are among the best in the industry in working with suppliers to create extreme value, and we will continue to deliver the ‘thrill-of-the-hunt’ to our customers.”