Inflation has forced a major change at Dollar Tree stores, as the company known for its low prices will now begin to increase them.
The store, which made its name offering goods for $1 or less, will now sell items for $1.25 and $1.50, according to The Wall Street Journal.
CEO Michael Witynski said Dollar Tree “[recognizes] the need to make adjustments in the current economic environment.”
Witynski said freight costs were clobbering profits, according to The Daily Gazette.
Shipping costs “reached unprecedented levels as a result of increased demand, limited capacity and shipping delays,” he said during Dollar Tree’s second-quarter earnings call.
The price increases come amid an inflationary wallop hitting retailers and consumers.
According to Trading Economics, the annual inflation rate was at 1.4 percent when former President Donald Trump left office, then spiked rapidly during the first months of the Biden administration. It now stands at 5.3 percent.
Witynski tried to put a positive spin on the change to a policy that had been in place since the chain’s founding in 1986, saying that a trial run on higher prices at some stores had been successful.
“For decades, our customers have enjoyed the ‘thrill-of-the-hunt’ for value at one dollar — and we remain committed to that core proposition — but many are telling us that they also want a broader product assortment when they come to shop,” Witynski said in a Tuesday statement.
“We are a ‘test-and-learn’ organization which is what we are doing with this new initiative. We listen to our customers and believe it will make shopping with us an even better experience.”
“Our merchants have proven that they are among the best in the industry in working with suppliers to create extreme value, and we will continue to deliver the ‘thrill-of-the-hunt’ to our customers,” Witynski said.
“Our brand promise is that customers get great value for what they spend at Dollar Tree. We will continue to be fiercely protective of that promise, regardless of the price point, whether it is $1.00, $1.25, $1.50.”
Twitter users reacted fiercely to the news.
Remember when the Fed said inflation was transitory and economists all expected inflation to top out during the summer. Good times.
Dollar Tree breaks the $1 barrier as costs take a bitehttps://t.co/mOQ5rNrLqs
— Stalingrad & Poorski (@Stalingrad_Poor) September 29, 2021
Dollar Tree – a company whose entire brand is based on every item priced $1 or less – announced they’re raising prices above $1 on “selected items” at all stores (not just DT Plus).
If you don’t see that inflation is embedded in general prices, you’re just not paying attention. pic.twitter.com/REmGltjplZ
— Ben Hunt (@EpsilonTheory) September 29, 2021
*DOLLAR TREE TO ADD PRODUCTS ABOVE $1 IN DOLLAR TREE PLUS STORES
“Transitory 2 dollar tree” stores
— zerohedge (@zerohedge) September 28, 2021
Although the Biden administration for months rejected claims that its spending was triggering inflation and insisted the rise in costs was a transitory blip, the Federal Reserve now admits that the economic picture will not improve soon, according to KATV-TV.
On Wednesday, Federal Reserve Chair Jerome Powell said the causes of inflation were “greater and longer-lasting than anticipated.”
The Fed in June increased its core inflation projection from 3 percent to 3.7 percent and now says overall inflation could hit 4.2 percent for the year.
Recent Bureau of Labor Statistics figures show that used car prices are up 31.9 percent from a year ago and gasoline prices a whopping 42.7 percent.
Republican Sen. Rick Scott of Florida said in a statement that the Biden administration is to blame for runaway inflation.
“Reckless government spending causes inflation. We’ve seen the disastrous consequences of the Democrats’ radical spending plans in consistently rising inflation month after month. We know Democrats won’t stand up and fight for American families. They only care about getting their liberal wish list, no matter the cost,” he said.
This article appeared originally on The Western Journal.