Even the dollar store is feeling the effects of rising inflation.
Amid higher costs for transportation, production and labor, Dollar Tree — which bills itself as the store where everything costs $1 — will begin charging more than a dollar on many of its items.. According to the company, it has begun testing prices as high as $1.50 amid a recent escalation in costs.
A disruption in global supply chains throughout the pandemic has resulted in the company needing to pay more for the goods it sells. Meanwhile, labor costs are also cutting into profitability as the company must pay workers more.
“We recognize the need to make adjustments in the current economic environment,” said Chief Executive Michael Witynski. He noted the pressures “all of us” are seeing on wages and freight — not only retailers, but also the companies that supply them.
The company hopes that adding some items about $1 will help it to diversify its business and offering a broader array of items to its store shelves.
Customers “are telling us that they also want a broader product assortment when they come to shop,” Witynski said in a statement. “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.”
Prices for producers spiked 8.3% year-over-year in the latest Producer Price Index report -while consumer prices, which typically lag the PPI, have jumped more than 5% for four straight months.
In addition, the company also announced a more than $1 billion expansion to its share buyback program.
Shares of Dollar Tree (DLTR) saw their biggest gain since October 2000, jumping 16% in Wednesday’s trading to close out at $100.51 a share.