So how much will prices go up at Dollar Tree stores? An initial guesstimate making the rounds on social media put the price hike at about $1.50 per item, but the press release stated that might just be the beginning. The announcement projected that by fiscal year-end 500 Dollar Tree Plus stores would be “offering an assortment of value-priced $1, $3, and $5 products.”
Why is Dollar Tree raising its prices?
In case you’re wondering what prompted the rise in pricing, it could be heavily tied to the rise in freight and transportation costs. In late August, freight data and media site Freightwaves reported that Dollar Tree said high freight costs were impacting their earnings. “They also chartered their own vessel due to lack of space on the steamship lines,” Timothy Dooner, a producer for FreightWaves told me today via direct message.
It isn’t just Dollar Tree
While paying $1.50 for a quality item might not sound like a lot of money, it is when you consider the percentage of the price increase. “While I do think $1 to $1.50 is a drastic price hike, the Dollar Tree price increase would be much more surprising if other “dollar stores” didn’t already sell some items for more than a dollar,” said Trae Bodge, smart shopping expert for TrueTrae.com. Because this is commonplace, Bodge said dollar store customers “already know to check prices before tossing an item into their carts.” But if you shop exclusively at Dollar Tree you might be in for a surprise—and so might Dollar Tree. Bodge said, “If a shopper is loyal to Dollar Tree only, this could be a shock. These shoppers may become more thoughtful about their Dollar Tree purchases, which could adversely impact sales.” And it isn’t just Dollar Tree updating their supply methods, which will probably impact costs at many major retailers. “Home Depot, Target, Costco, have also chartered their own vessels due to lack of space,” Dooner said. Though all these retailers “still have to go through the same congested ports.” Because of the issues we’re seeing in shipping and manufacturing around the world right now, Bodge said “we’ll all need to prepare ourselves for prices to increase on everything from consumer packaged goods to fresh foods, to gas.”
Why is Dollar Tree changing prices now?
In the past, we might have looked for bargains or cute decorating items as we got closer to the holiday season. But after over a year of increased spending due to the pandemic, there’s no isolated peak shopping season anymore, it’s more year-round. “This extended perpetual peak season that’s been going on for a year has come home to roost for retailers,” Dooner said, “and now consumers are starting to see the impacts as well in both what they can’t find on the shelves and what they’re paying at the register.” After 18+ months that involved more time at home along with homeschooling and an increase in crafts, there never really was downtime in stores. “We’re shopping more during the pandemic so that already had freight volumes near peak levels,” Dooner said. Add to that all the holiday freight and a price increase seems almost inevitable. “Elevated freight volumes are at sustained levels well beyond normal levels. This has swallowed up space on vessels and driven up rates from China to the US from $2,000 to $20,000,” Dooner added. And before you despair, the price hike is also probably a long time coming. As reported on Yahoo News, back in 2019, Dollar Tree’s investors were pressuring them about the $1 price which stayed the same since the brand was founded over thirty years ago. They also estimated that “$1.00 in 1986 is worth approximately $2.30 today, due to inflation.”
Plan well, shop early
So what does all of this mean for you? Smart shoppers will continue to find ways to save, and we’ll try to help you find some of the best buys and bargains. And you might want to start your holiday shopping early this year to avoid delays in shipping or fulfillment. We’ll be adding shopping tips, early sales info, and more in the lead-in to the holiday season. Next, Which Stores Will Be Open on Thanksgiving Day 2021?
