How Dollar Tree Sells Almost Everything For $ 1, Even When Inflation Is Hiding

Dollar Tree Inc. is famous for selling most of its products, from a pair of flip flops to a small bottle of detergent, for a dollar each.

The strategy, which attracts loyal shoppers looking for bargains, left the discount chain less room than its competitors to handle rising costs this year. The Covid-19 pandemic has pushed up transport prices, workers’ wages and the prices of some raw materials.

“We will always deliver at dollar cost, as our customers have been expecting for over 30 years,” said Michael Witynski, a grocery store veteran who joined Dollar Tree in 2010 and took the helm a year ago. year. The challenge, he said in a recent interview, is to keep finding ways to buy products like holiday decorations, snacks, and craft supplies for around 43 cents and then charge $ 1. $ to buyers.

Prices are rising for a range of goods and services as shipping and manufacturing remain hampered by the pandemic and other factors. At the same time, demand for many products is high as American consumers continue to emerge from the lockdowns of last year. In many cases, consumer goods companies such as Procter & Gamble Co. and General Mills Inc. pass these price increases on to consumers. For a chain that attracts buyers with mostly $ 1 products, adapting can be more difficult.

The majority of Dollar Tree’s products are store brands, which gives it flexibility in an inflationary environment. Last year, Dollar Tree changed the packaging of a successful metal hanger, Witynski said, switching to a smaller, less expensive cardboard hook for off-the-shelf display. The retailer started shipping $ 1 gift bags, another big seller, in boxes of 72, up from 24 to save on shipping costs, he said. Cartons of fresh eggs vary between 18, 12 or 6 packs, depending on cost.

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