On Tuesday the Dollar Tree said that they will be raising its prices to $1.25 due to rising cost of goods and freight, and this will be for the majority of their products.
They also said the reason for raising its prices to $1.25 was not due to "short-term or transitory market conditions" and stated that the price increases will be permanent. Increasing the prices will also allow the company to cope with high merchandise cost increases as well as higher operating costs, such as wages, it said.
"(Dollar Tree) believes this is the appropriate time to shift away from the constraints of the $1.00 price point in order to continue offering extreme value to customers," the company said in a statement.
Dollar Tree was one of the last true "dollar stores" after most of its competition had moved away from that price point.
Dollar Tree which is based in Chesapeake, Virginia, said back in September that it was testing the higher prices at certain stores. On Tuesday, it was stated that the new prices will hit more than 2,000 additional Dollar Tree stores in December and complete the rollout to all its stores by early next year.
CEO Michael Witynski said he feels that the Dollar Tree customers will remain loyal to them.
Its shoppers "believe that at $1.25, it's still going to be an undeniable value because of what they're seeing out in the marketplace," Witynski said on a call with industry analysts. "And they know that Dollar Tree hasn't raised its price in 35 years, so they're giving us credit."