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

Source: WSJ:

July 12, 2021 at 07:41

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

Discount chain bets it can manage rising wages and shipping rates by tinkering with selection and trimming costs

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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