Dollar Tree Will Raise Prices to $1.25 by End of April

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Dollar Tree will raise the prices of most items in all of its stores to $1.25 from $1 by the end of April, the company said on Tuesday, after a successful test of the new pricing strategy.

“For 35 years, Dollar Tree has managed through inflationary periods to maintain the everything-for-one-dollar philosophy,” the company said in a statement accompanying its quarterly financial statement, but it felt that now was the time to raise prices. “This decision is permanent and is not a reaction to short-term or transitory market conditions,” it added.

The dollar store giant said that the price increase, which it first announced it would test in September, will help mitigate freight and distribution costs and wage increases and will allow it to bring back some products that it was no longer able to offer at $1. It said that 91 percent of customers it had surveyed said they would continue to shop at Dollar Tree after the change.

Shares of Dollar Tree rose more than 11 percent after the announcement. The company operates nearly 16,000 stores in the United States and Canada.

Dollar stores have been struggling with a slowdown in sales and shrinking profits. Walmart and other retail giants have also said supply chain issues and labor costs have been adding to expenses but that the increased costs largely have been offset by sales growth.

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