Dollar Tree Dilemma
This week, our world was rocked – as were many worlds of fellow budget babes. Dollar Tree (Brianna’s favorite store) announced that they would need to meet the demands of the economy and would be increasing prices to more than a dollar. A moment of silence, please.
In all seriousness, this does mark a bit of a dilemma in our financial economy and brings to question – is this the end of the dollar store brand as we know it? Dollar stores and affordable variety stores of the like have been a part of American culture for over a century now. In 1879, Woolworth opened the first “5 and dime” variety store in Utica, New York called The Great Five Cent Store. This established his long living institution of five and ten cent stores, which over time has increased with inflation and economics to the Dollar Trees, Dollar Generals, and Family Dollars as we know them.
It is clear that our culture is able to adapt to variety stores even with price hikes, so why is this a big deal? Well, that’s what we’re here to tell you. First, Dollar Tree was the last store to truly offer everything for only $1. From sacks to home furnishings, frozen entrees to cleaning products – everything was just $1. This made it truly the place Brianna and I lived off of in college (and beyond – we still love it!) in order to get the move value for our $1. Competitors had begun to raise their prices, and with stores like Five Below, the value of products were similar to those in your larger big box stores, but at Dollar Tree everything was even, and it was perfect.
This price increase comes due to a number of factors including the one forcing a lot of businesses hand, and that is issues caused by supply chains. One of the many reasons Dollar Tree was able to keep their costs so low for so long was due to brandless items coming from oversees distributors. With the supply chain issues, items were running out of stock and stores are looking for higher-cost goods to fill the shelves of their stores. These wage increases on distributors, freight carriers, suppliers and also wage increases due to cost of living for employees all play a part into the decision to increase prices. These all play REASONABLE parts for prices to increase.
What is unreasonable – and in some parts a bit frightening – is that for months Wall Street has been badgering Dollar Tree to increase their prices. They have been in the ear of the board of Dollar Tree reminding them of the reasons listed above, letting them know that the American people are willing to pay more than a dollar for goods, that the economy is on a rebound, etc. And Dollar Tree gave in to the pressure of Wall Street, as many companies do. With the news of the price increases, they had their stock had their best day in 21 years.
Tell us – are you a loyal Dollar Tree customer, and will this change affect you? Or do you agree with Wall Street on this one? Let us know below!
