The Buck Stops Here! Inflation Is Forcing Dollar Tree To Raise Prices On All Products To $1.25.

For 35 years, Dollar Tree has hung its hat on the fact that any item you want to buy in one of their stores will only cost you a buck. One dollar.  Whether it’s toothpaste, party supplies, food, or aluminum foil, their brand was the same as their retail price—one dollar. 

That’s about to change in the 8,000 stores dotted from coast to coast. 

The reason for the price change is inflation. Even though the original intent of CEO Michael Witynski was to keep prices locked at one dollar, he says he’s forced to make adjustments because of inflation. 

Say goodbye to all those signs that say “Everything’s $1” because they are getting thrown in the trash. By May of 2022, the prices are going to be $1.25. 

Here’s what the company said in a release. 

“This is the appropriate time to shift away from the constraints of the $1.00 price point.”

Okay, now they have to see what the fallout will be. Many retail analysts say it’s a stupid decision.  Made to hasty and one that will backfire on the company. They predict the company’s chief rival, Dollar General, will take advantage of the situation and move some of their products to $1. 

Customers will be shocked at the 25% price increase across the board, but Dollar Tree is following what Dollar General and 99 Cents Only has already done; raise prices. 

Even though the company would have been hard-pressed to keep prices at $1 forever, the timing of this move is being criticized because of the randomness of choosing $1.25 as a price point. 

Mark Cohen is director of retail studies at Columbia University’s business school and has this to say about the increase. 

“$1.25 doesn’t have any connection of value like a dollar does. I don’t think it triggers the same draw in the mind and heart of a customer.”

Dollar Tree is going to find out in the coming year if this move made cents. 

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