How Dollar Tree Sells Nearly Everything for $1, Even When Inflation Lurks

Monday - 12/07/2021 07:41
Discount chain bets it can manage rising wages and shipping rates by tinkering with selection and trimming costs
Dollar Tree plans to stick with its strategy of selling most of its products for a dollar, leaving it less room than rivals to manage rising costs. PHOTO: ERIN SCOTT/REUTERS
Dollar Tree plans to stick with its strategy of selling most of its products for a dollar, leaving it less room than rivals to manage rising costs. PHOTO: ERIN SCOTT/REUTERS

Dollar Tree Inc. DLTR 1.26% is famous for selling most of its products—from a pair of flip flops to a small bottle of detergent—for a dollar apiece.

The strategy, which draws in loyal shoppers looking for bargains, has left the discount chain with less room than rivals to manage rising costs this year. The Covid-19 pandemic has pushed up transportation rates, workers’ wages and prices for some raw materials.

“We are still going to deliver at a dollar as our customers have expected for over 30 years,” said Michael Witynski, a grocery veteran who joined Dollar Tree in 2010 and took over as its chief executive a year ago. The challenge, he said in a recent interview, is to continue to find ways to buy products such as holiday decorations, snacks and craft supplies for around 43 cents, then charge $1 to shoppers.

 


The U.S. inflation rate reached a 13-year high recently, triggering a debate about whether the country is entering an inflationary period similar to the 1970s. WSJ’s Jon Hilsenrath looks at what consumers can expect next.

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