It's officially the end of an era for the popular retailer Dollar Tree. On Wednesday, it was announced that the company will begin selling items that retail more than $1 at some of its locations. This decision will be made, in part, due to the rising shipping costs and overall costs of goods as a result of the COVID-19 pandemic, something that has been affecting industries around the globe. According to The Associated Press, rising shipping costs have caused Dollar Tree to lost $1.50 to $1.60 out of its per-share profits this year.
"For decades, our customers have enjoyed the 'thrill-of-the-hunt' for value at one dollar - and we remain committed to that core proposition - but many are telling us that they also want a broader product assortment when they come to shop," Dollar Tree CEO Michael Witynski said in a prepared statement.
These increased prices will begin to be seen in Dollar Tree stores, with items retailing for $1.25 and $1.50 soon being mixed among the regular product of the store. According to Witynski, this change in the expected prices will not make an impact on the quality of the stores' products.
"We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50," Witynski added.
The company has reportedly already begun to test selling items of increased value, debuting a new "Dollar Tree Plus" section in nearly 8,000 of its locations. These Dollar Tree Plus sections have items that can retail as much as $5. The company bean testing the Dollar Tree Plus plan all the way back in 2019.
"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," former President and CEO Gary Philbin said in a statement in 2019. "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. During this test, we look forward to measuring and assessing the initial results and understanding if the introduction of multiple price points across a broader set of stores is in the best interests of our customers, Company and shareholders."
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