Two of the largest U.S. dollar store chains warned that shoppers might face rising prices as a result of the ongoing trade war between the U.S. and China, Reuters reported Thursday.
Executives from both Dollar Tree and Dollar General told analysts on their post-earning calls that tension with Beijing will likely hit their businesses. The warning comes after President TrumpDonald TrumpJan. 6 committee chair says panel will issue a 'good number' of additional subpoenas Overnight Defense & National Security — Presented by AM General — Pentagon officials prepare for grilling Biden nominates head of Africa CDC to lead global AIDS response MORE announced an increase in tariffs on $200 billion of Chinese goods earlier this month.
Dollar General executives said the retailer was working with vendors to “mitigate the impact."
“Even with these efforts, we believe our shoppers will be facing higher prices as 2019 progresses,” Dollar General Chief Financial Officer John Garratt said on the call.
Dollar Tree president and CEO Gary Philbin said in a statement that new tariffs Trump has levied against China will be “impactful” to their business and consumers in general.
Dollar Tree is the only major chain that has so far stayed true to the promise that everything in the store is $1.
The retailer, however, has been testing a new Dollar Tree Plus! Collection with a selection of more expensive products at certain locations, according to Business Insider.
"With its 'Everything's a Dollar' model, Dollar Tree has remained one of the most unique, differentiated and defensible brand concepts in all of value retail. However, we have always been a 'test-and-learn' organization that is committed to evaluating all opportunities to deliver great value for our customers while driving long-term value creation," Philbin said in the earnings release.
Trump earlier this month announced tariffs on $200 billion of goods from China will rise to from 10 percent to 25 percent. He also warned of tariffs on an additional $325 billion of Chinese goods "shortly."