Dollar Tree increasing prices to $1.25

Dollar Tree announced on Tuesday that it is increasing its price point to $1.25.

The company, which has been providing consumers with goods at its eponymous price for 35 years, said it was shifting away from its strict $1 price point “to continue offering extreme value to consumers.” The decision is permanent, the company said in a statement.

The company said the move was not made in response to short-term or transitory market conditions, but instead to “enhance the Company’s ability to materially expand its offerings, introduce new products and sizes, and provide families with more of their daily essentials.”


“The Company will have greater flexibility to continue providing incredible value that helps customers get the everyday items they need and celebratory and seasonal products Dollar Tree is best known for,” it added.

It also said that the new price point will allow the company to reintroduce a number of products that were discontinued because of constraints from the $1 limit.

“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,” Dollar Tree CEO Michael Witynski said in a statement.

“Guided by Dollar Tree’s same founding principles, we will be relentless in our commitment to offer our customers the best value possible,” he added.

The decision does, however, come amid a tense moment for the U.S. economy, as supply chain bottlenecks are causing prices to spike nationwide.

The Labor Department released new data earlier this month which illustrated that annual inflation is at a 30-year high.


Dollar Tree said the elevated price will enable it to “return to its historical gross margin range by mitigating historically-high merchandise cost increases, including freight and distribution costs, as well as higher operating costs, such as wage increases.”

The announcement of the new price point comes after the company announced in September that it would begin to sell products at prices higher than the standard $1 because consumers were asking for a “broader product assortment.” It planned to roll out products at $1.25 and $1.50.

“We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs,” Witynski said in a statement at the time.

The company also has “Dollar Tree Plus” stores, which sell items for $3 and $5.