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Dollar Tree Says $1.25 Price Point to Become New Standard


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© Bloomberg. Betty Crocker brand plastic containers sit on display at a Dollar Tree Inc. store in Chicago, Illinois, U.S., on Tuesday, March 3, 2020. Dollar Tree released earnings figures on March 4. Photographer: Daniel Acker/Bloomberg

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(Bloomberg) — Dollar Tree Inc (NASDAQ:). will sell a majority of its products for more than $1, edging away from the approach that gave the discount chain its name.

After 35 years of selling goods for a buck, Dollar Tree is boosting its standard price point to $1.25 by the end of April, the company said in a statement Tuesday. While the decision is “not a reaction to short-term or transitory market conditions,” Dollar Tree acknowledged the inflationary environment and said the price boost will help mitigate historically high costs, including freight and distribution expenses, as well as wage increases.

“Lifting the one-dollar constraint represents a monumental step for our organization,” Chief Executive Officer Michael Witynski said in the statement. The move will allow Dollar Tree to expand its product assortment and reintroduce some items that were pulled due to the $1 constraint.

The move signals the end of an era for Dollar Tree, which has long based its business on the price point, as inflation pushes up the cost of many goods. 

The company recently rolled out the higher price in select stores, and the tests “have demonstrated broad consumer acceptance of the new price point,” Witynski said. Dollar Tree plans to bring it to more than 2,000 additional stores in December and complete the rollout by the end of the first quarter of fiscal 2022. 

The shares slipped 1.9% before regular trading in New York after the company narrowed its earnings forecast and reported results roughly in line with Wall Street’s expectations. Earnings this year will be $5.48 to $5.58 a share, it said in a statement, compared with a prior outlook of $5.40 to $5.60.

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