‘My stomach hurts’: Dollar Tree fanatics protest new $1.25 prices
Some shoppers began derisively calling the chain “$1.25 Tree” and saying it should change its name.
The review highlights the risks Dollar Tree – the last of the major dollar store chains to sell almost everything for a dollar – took when it ditched its $1 brand identity.
“It’s the worst time to raise the price, when everything else is so high,” she said.
We won’t know for sure if customers are turning their backs on Dollar Tree’s new pricing until it releases its quarterly results in the coming weeks. But there are signs the move could alienate some buyers.
Dollar Tree added the $1.25 prices to more than 2,000 stores in December (it has about 8,700 stores in the U.S.), and Coresight said in a report that its “drop in shoppers appears to coincide with its rising prices. The company warned of an “over-reliance on a single week-long data point” but said the latest numbers “could reflect an exodus of buyers following” the shift in prices. price.
“We have had a very positive response from the overwhelming majority of our customers around the $1.25 price point and the extreme value and wider product selection it has enabled, especially in these inflation time,” a Dollar Tree spokesperson said in an email. “We look forward to providing more details on this initiative on our next earnings call.”
“Give up the dollar, I believed, and we’d give up our niche,” he wrote.
As recently as August, Dollar Tree chief executive Michael Witynski said the company had pledged to pay $1. “This dollar price level is going to be more important than ever,” he said on a call with analysts.
Selling everything for $1 was also easy for Dollar Tree store operations. Workers didn’t have to constantly spend time changing price displays in aisles or labels on shelves, and it was simple for customers on tight budgets to keep track of their purchases.
Some commodities also suffered from the $1 strategy. The chain had to drop several “customer favorites,” the company said in November, particularly in packaged and frozen foods. The price increase will give Dollar Tree the flexibility to reintroduce these items, expand its selection and bring in new products to attract customers, according to the company.
Dollar Tree had started selling $1.25 and $1.50 items in select stores and said it had received positive customer feedback on the test, leading the company to announce in November that it would be moving to $1.25 in all its stores.
“All of us in the Dollar Tree community hoped that wouldn’t happen,” she said, adding that a dollar was a “reliable” prize.
“There was no math in your head or anything like that,” she said. “You know you could go to the Dollar Tree with $10 and walk away with 10 items.”
Although Dollar Tree has put up new signs in stores that say it will offer new items and “more thrills” at $1.25, it has yet to see the change.
“It’s like they promise you something more for 25 cents. But they don’t. It’s still the same quality and the same kinds of products.”