Inflation has been forcing businesses into dire situations. The United States witnessed a shocking 4.2 percent rate of inflation in July, which was the highest it has been in decades. This means consumer goods are costing more now than usual, and retailers are feeling the pressure to raise their prices to cover costs. Dollar Tree, a dollar store retailer famous for only settling items at $1, has since made the announcement that they would start selling items for more than a dollar in order to cover rising shipping costs and beat off inflation.
Dollar Tree investors were stunned when the company’s stocks took a hit of $1.50 to $1.60 per share of profits this year, which is a major hit for any business, let alone one that sells items for only a dollar. Because of this, the national retailer was forced to open up the flood gates by allowing goods in their stores that would cost customers more than a buck.
“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,” said CEO Michael Witynski in a prepared statement.
Dollar Tree is a dollar store retailer known for only settling items at $0.99, but because of inflation and the pandemic, the company has had to raise its prices in order to cover rising shipping costs and beat off inflation. This announcement came with a major hit on Dollar Tree’s stock price, which dropped nearly seventeen percent in one trading session.
Dollar Tree’s stock prices dropped from $106.32 to a low of $87.64 per share since the announcement but have been on their way up ever since and currently sit at about $95 per share today. Because of this, it is clear that customers are not thrilled with Dollar Tree’s decision to start selling items over a dollar, but the change probably wouldn’t have taken place if it weren’t for inflation and the economic crunch created by the pandemic.
Today’s consumer goods are costing more than usual because of an increase in shipping costs and overall inflation of the market. This is why retailers are feeling the pressure to raise their prices in order to beat off inflation, but this has made customers unhappy.
Although Dollar Tree stores will now start selling items for more than a dollar, the company claims to still be committed to one thing it has been working toward for the entire length of its stay in the economy – providing value to customers. Deals will still be available in the dollar store shop even though some items will cost more than they previously did.
“We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50,” Witynski said.
Do you think customers will still shop at Dollar Tree locations if items cost more than a dollar? Will you keep going to this retailer despite the changing prices of their items in stock?