Inflation Is Here: Dollar Tree Switches Up, Products Will Now Cost $1.25

Inflation Is Here: Dollar Tree Switches Up, Products Will Now Cost $1.25

Dollar Tree

Inflation Is Here: Dollar Tree Switches Up, Products Will Now Cost $1.25. Photo by Mike Mozart, Instagram.com/MikeMozart https://www.flickr.com/photos/jeepersmedia/14712781206 https://creativecommons.org/licenses/by/2.0/

Shoppers at Dollar Tree are in for sticker shock. Prices are no longer a dollar at the discount variety store and Fortune 500 company. The company, which operates 15,115 stores in the U.S. and Canada, has raised its prices 25 percent to $1.25 for most of its products. Inflation is here.

The annual inflation rate surged to 6.2 percent in October compared to a year earlier– the highest since November of 1990, Trading Economics reported. The U.S. inflation rate is projected to trend around 2.3 percent in 2022 and 1.9 percent in 2023, according to economists.

The rapid pace of inflation has hit consumers hard. Despite rising wages, inflection has affected workers’ ability to pay for food, shelter, electricity and cars.

Dollar Tree says it’s the company’s first price rise in 35 years and it blames the rising cost of goods and freight. The higher prices will allow the discount retail chain to cope with high merchandise cost increases and higher operating costs such as wages, ABC News reported. And the new prices will be permanent.

“(Dollar Tree) believes this is the appropriate time to shift away from the constraints of the $1.00 price point to continue offering extreme value to customers,” the company said in a statement.

The company said it has been testing higher-priced products for months, opening Dollar Tree Plus stores with products selling for $3 and $5. The company said shoppers had a “positive customer reaction” and it announced plans to try $1.25 and $1.50 at some traditional Dollar Tree locations, NPR reported.

Wall Street seemed to like the price increase, even if consumers didn’t. The company’s stock rose 9.2 percent on Nov. 23 following the announcement, which was paired with the company’s quarterly earnings. Analysts at Citigroup called the earnings “disappointing” but said investors are looking past earnings to the company finally raising prices.

Inflation has even hit Dollar Tree smh,” Nicole @BottomOfDeOrder tweeted.

“INFLATION IS REAL,” Colt Mavity @theroamingcolt tweeted.


In a call with investors, CEO Michael Witynski said that the new prices will allow the company to bring back items it previously abandoned because they cost more than $1, Business Insider reported. The price increase will also be great for profits, allowing the publicly traded company to return to profit margins of 35-to-36 percent in 2022.

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Photo by Mike Mozart instagram.com/MikeMozart