Dollar Tree Experiences ‘Meaningful Decline’ in Shoppers After Price Hike — Will Strategy Be Revised?

Dollar Tree Discount Store. Dollar Tree offers an eclectic mix of products for a dollar. stock photo
jetcityimage / iStock.com

The Dollar-and-a-Quarter Tree apparently is not going over well with certain consumers who are used to whipping out a $1 bill and not a penny more. Many are taking to social media to complain about it, but Dollar Tree executives say there’s really no problem.

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In late November, Dollar Tree announced it would begin rolling out a price increase to $1.25 for many of its store items that previously sold for $1. In a press release at the time, Dollar Tree said the decision “is permanent and is not a reaction to short-term or transitory market conditions.”

The price hike was put in place for a few reasons, not least because prices in all sectors of the economy were rising due to inflation, and Dollar Tree still felt a buck-and-a-quarter was a pretty good value.

“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” CEO Michael Witynski said in a statement.

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Well, not all shoppers are happy about it. Dollar Tree saw a “meaningful decline” in shoppers following the price hike, according to a Jan. 11 note from industry tracker Coresight Research.

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Meanwhile, angry customers have been venting their frustration on Twitter, Facebook, TikTok and YouTube, CNN reported. Hundreds of thousands of video bloggers have even posted videos of their reactions.

Dollar Tree was the last of the big dollar store chains to sell nearly everything for a dollar. Moving to a higher price point during a period of spiraling inflation does not sit well with some consumers.

“I wish they wouldn’t have done that because most of their shoppers are people who are not getting paid a lot of money,” Leniza Costa, a beauty influencer in Rhode Island, told CNN. “This is the worst time to increase the price, when everything else is so much.”

In December, Dollar Tree added the $1.25 prices to more than 2,000 stores of its 8,700 U.S. stores, CNN noted. Coresight said the retailer’s decline in shoppers “appears to coincide with its price hike.”

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But Dollar Tree officials stand by their decision.

“We have had a very positive response from the overwhelming majority of our customers around the $1.25 price point and the extreme value and broader product selection it has enabled, especially in these inflationary times,” a company spokesperson said in an email to CNN. “We look forward to providing more details on this initiative during our next earnings call.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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