Dollar Store No More

 Dollar Store No More 

Dahlia Berriman  

For 35 years, everything at Dollar Tree was sold for only a dollar. The company believed that they could get by with this price. As time and prices have changed, prices have now changed to $1.25. Now, a quarter difference doesn’t seem like a lot for one item, but the prices start to add up and reflect on the economy of inflation and demand. 

Investors applied pressure for prices to be raised and the CEO, Michael Witynski said, “New prices would allow the company to withstand rising supply chain and labor costs, which were eating into profit margins.” Another reason for this change in price is due to inflation. 

Due to inflation, prices for products were more expensive and the company needed to be able to obtain their materials to still make a profit. The company had a profit margin around 35%, and they need to maintain this percentage for next year. They also needed to change their prices to create more competition. Because other companies had higher prices, Dollar Tree needed to also up their prices and to be able to combat the higher prices. 

The graph represents the sales growth for each of the dollar store companies. When Covid hit, sales mainly went down and the companies lost lots of money. A few months later, sales began to increase, but the companies still had to be able to pay for higher prices and wages for their employees. Thus causing prices to also rise. 

 Works Cited

Perri, Janine. “Dollar store sales buck COVID era retail trends - Bloomberg Second Measure.” Second Measure, 5 April 2021, https://secondmeasure.com/datapoints/dollar-store-sales-buck-covid-era-retail-trends/. Accessed 25 April 2022.

Simas, Kayla. “$1 no more: One dollar store is raising prices while customers flock to its competitor.” SILive.com, 19 March 2022, https://www.silive.com/news/2022/03/1-no-more-one-dollar-store-is-raising-prices-while-customers-flock-to-its-competitor.html. Accessed 25 April 2022.

Tayeb, Zahra. “Dollar Tree Customers 'Sickened' by Decision to Hike Prices to $1.25.” Business Insider, 16 January 2022, https://www.businessinsider.com/dollar-tree-criticized-price-hike-loyal-customers-unhappy-shopping-retail-2022-1. Accessed 25 April 2022.