Dollar Tree, a major discount store chain, announces increase in prices to $1.25

The Dollar Tree, one of the nation’s largest dollar stores, said Wednesday that it plans to increase the price of some of its products to $1.25 at the end of April. The announcement comes less than two months after Dollar Tree rival Dollar General increased the price of hundreds of its basic items to $1 from $1.25.

“I can’t sit on my hands like that and I think we would lose relevance,” Dollar Tree CEO Bob Sasser told Bloomberg in an interview. “This will be big for us.”

Dollar Tree said it will raise the price of about 3,000 items across 200 stores. The company, which also owns the Family Dollar chain, had 45,000 stores and employed more than 170,000 people in 2016.

Dollar Tree executives said in a statement Wednesday that an average Dollar Tree store receives more than 30 percent of its revenue from groceries and needs to respond to price shifts in the grocery industry.

The company joins other retailers, including Amazon, in decreasing prices in the face of new online competition.

Retailers have responded by lowering prices, including the value of items offered, and expanding their inventory. J.C. Penney, for example, had more than 1,300 new brands available for sale in 2018, and is holding a sale on many of its clothes in an effort to lure back customers.

Dollar Tree’s price-raising announcement comes a year after the company acquired the Family Dollar chain for $8.5 billion. Some analysts have described it as a “deal of the century,” in a media report in The Street.

Dollar Tree currently operates 4,306 stores in 45 states and the District of Columbia.

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