For those Americans still in denial about the effects of higher inflation, check out Dollar Tree. The discount retail chain recently announced they will start selling products that cost more than a dollar.
Dollar Tree Will Start Selling Items That Cost More Than A Dollar
Dollar Tree is a popular discount retailer that sells nearly everything in its inventory for $1. Due to the rising prices of many goods, the chain said it will add more products that cost a bit more.
Many see the move as a testament to pressures on companies to offset the rising cost of goods. A growing shortage of retail workers plus supply chain disruptions, and higher inflation rates are pushing prices higher.
The retail chain said it would start selling products priced at either $1.25 or $1.50 at some stores. It will also introduce higher-priced products at selected outlets. Previously, Dollar Store has already tried selling items costing $2 and $3 since 2019.
In those cases, the company displays the pricier items in a shelf section labeled Dollar Tree Plus. Some of the Dollar Plus shelves are still available in hundreds of stores, which total around 8,000.
Combination of Inflation and Positive Feedback
Michael Witynski, CEO of Dollar Tree, said in an interview that rising costs and positive feedback helped push the decision to add more expensive items.
The above-$1 price point allows the company to offer new premium items such as frozen meat or seasonal merchandise. Hopefully, the strategy results in customers spending more per trip.
“We recognize the need to make adjustments in the current economic environment,” Witynski said. He added that “the pressure all of us are seeing on wages, freight and on our suppliers and cost increases.”
Inflation Is Creating Trouble
Rising inflation in the US is creating trouble for many companies as prices of raw materials, labor, and even shipping rates are continually going up.
Dollar Tree’s unique pricing model survived longer than most companies as it stuck to the lowest-priced items. However, the company is now facing the same problems many retailers have.
Even as manufacturing costs are going up, many companies are hoping that the supply chain disruptions will eventually fade away. Coupled with a fear that many consumers do not favor absorbing higher costs, some avoided passing on the increases.
As the Federal Reserve now amidst that inflation will take longer to subside, retailers are now slowly announcing price hikes on their favorite products.
Dollar Tree Pressured to Go Beyond $1 Price Point
As a result, even Dollar Tree now needs to bite the bullet. Investors have long suggested to the company’s management team to offer more products outside the $1 threshold. However, senior company personnel insists that the $1 image is the main reason why customers go to their stores.
With no end to higher inflation in sight, the company started embracing the change to go beyond a dollar. Hopefully, Americans will continue to shop at the stores even when the buck stops there.
Watch the 11Alive news video reporting that Dollar Tree breaks the $1 barrier on some items:
Do you shop at the Dollar Tree? Why do you frequent their stores? Will you change to a new shop once they start selling items higher than a dollar?
Tell us what you think of the retail chain. Share your comments below.