- Dollar Tree is raising some prices above $1 in certain stores.
- It's also bringing its range of $3 and $5 products to more locations.
- The chain has been hit hard by rising shipping and labor costs, which are squeezing profit margins.
- See more stories on Insider's business page.
Dollar Tree said Tuesday that it was raising prices above $1 in some of its stores.
In its statement, it didn't say what product prices would change, or at which stores.
"Our brand promise is that customers get great value for what they spend at Dollar Tree. We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50," CEO Michael Witynski said.
Dollar Tree Plus, which is currently in 340 stores, will be added to 500 locations by the end of this year, and a further 1,500 by the end of fiscal 2022, the company said.
Stores that currently sell these items have seen an overall sales lift of around 6%, the company said.
The goal is to bring it to 5,000 locations by the end of fiscal 2024. Dollar Tree has nearly 8,000 stores.
The chain is the biggest retailer that is focused on $1 deals.
"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," Witynski said.
He continued: "We believe 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."
It first tested Dollar Tree Plus in stores in 2019.
Dollar stores have grown at a rapid rate across the US since the 2008 recession, focusing on consumers that favor deals and discounts.
Increasingly, their business models have come under pressure from inflation and the rising cost of goods, shipping, and labor.
In a recent earnings call with analysts, Dollar Tree CEO Michael Witynski addressed these concerns.
"Freight costs have reached unprecedented levels as a result of increased demand, limited capacity, and shipping delays," he said, adding that Dollar Tree is "more sensitive" because it promises to offer items at $1, meaning that it has to absorb rising costs.