‘My stomach hurts’: Dollar Tree fanatics protest new $1.25 prices

Dollar Tree’s recent decision to end $1 prices after 35 years and raise most items in stores to $1.25 drew an angry response from many loyal customers on Twitter, Facebook , TikTok and YouTube.
Video bloggers with hundreds of thousands of subscribers posting videos of their reactions to the price hike – or walking into a store for the first time and seeing Dollar Tree’s ubiquitous “Everything’s $1” green and yellow circles replaced by $1.25 signs.

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.

“I wish they hadn’t done that because most of their buyers are people who don’t get paid a lot of money,” said Leniza Costa, a beauty influencer in Pawtucket, Rhode Island, which is “known for always going” to Dollar Tree.
Costa will not buy from dollar tree (LTRD) as often and will instead look to buy $1 items from walmart (WMT).

“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.

An online weekly survey of about 500 consumers by Coresight Research, a retail research and advisory firm, found a 6.2% drop from Dec. 27 to Jan. 3 in the number of customers who said they purchased non-food items from Dollar Tree compared to the previous two weeks. A more pronounced drop of 12.2% was recorded among buyers aged 45 to 60. Other chains, including Walmart and Dollar General, did not see similar declines in surveys.

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.”

“Our Niche”

The $1 price tag was almost sacrosanct for Dollar Tree, which sells toys, home furnishings, kitchenware, holiday decorations, stationery, party supplies, arts and crafts. crafts, books, food, household essentials and other items.
Macon Brock, a founder of Dollar Tree, said in his 2017 autobiography that “I held the dollar-only concept as sacred. That was it. Without it, we’d be just another discount retailer.”

“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.

Dollar Tree raised its prices because its business was under pressure to keep everything under $1. Labor, transportation, fuel, freight and shipping costs have increased, which have weighed on the company’s profits.

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's move to $1.25 carries brand risks.

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.

On December 12, in response to a activist investor Pushing for broader changes to the company, including the appointment of an all-new board, Dollar Tree’s board said the price hike had been a success so far. here.
The performance of stores with $1.25 prices “continues to validate our previous tests and demonstrates the success of the company’s strategy and execution,” the board said in a statement. declaration. The board said the move to $1.25 “was not a decision the company took lightly and required careful planning, including to ensure it continues to provide a meaningful assortment. with extreme value” to buyers.
But some retail analysts said the move was rushed, jeopardized brand image and would lead shoppers to turn to rivals such as General dollar (CEO), which sells about 20% of its products for $1.
The price change has “saddened” Perfume specialist, a video blogger who posts about her shopping at Dollar Tree and other stores, and will lead her to shop there less often. (She spoke on the condition that her name be withheld from the story to protect her identity.)

“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.”

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