While the company isn't planning to change its name to "$1.50 Tree," Dollar Tree has heeded calls from investors to "break the buck" and raise prices for some items. Since its founding in 1986, when $1 was the equivalent of around $2.50 today, the chain has sold nearly everything for $1 but it now plans to experiment with slightly higher prices, the Wall Street Journal reports. The chain changed its name from Only $1.00 to Dollar Tree in 1993. In a few hundred of its 7,900 stores in the US, items have been sold in a "Dollar Tree Plus" section for $3 and $5 since 2019. The company says it will now experiment with items priced slightly over $1 in those stores and more than 100 others.
This summer, inflation hit a 30-year high and Dollar Tree reduced its profit outlook, saying it was being hit hard by rising freight and supply chain costs, the Journal reports. Witynski said the company was also dealing with labor shortages in its stores and warehouses. USA Today reports that the company plans to have 500 stores with Dollar Tree Plus items by the end of this year, 1,500 by the end of 2022, and at least 5,000 by the end of 2024. The company also owns the 7,900-store Family Dollar chain, which already sells many items for over $1.
"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, per the AP. He said the company will "fiercely" protect its promise of value, " regardless of the price point, whether it is $1.00, $1.25, $1.50." The company's stock jumped 16% Wednesday after it disclosed the new pricing plan. (Read more Dollar Tree stories.)