Discount chain closes over 75 stores and raises prices

Dollar stores used to have a simple mission. Every item was sold for a dollar, which made shopping easier for customers.
That's no longer the case.
“A dollar in 2025 buys significantly less raw material, energy, and labor than a dollar in 2019,” certified financial counselor Robin Valadares, who closely follows the retail market, told Simply Recipes.
“If these stores had stubbornly refused to raise prices, they would have been forced into a practice known as shrink-flation, where the price stays the same, but the product gets smaller.”
Raising prices, she noted, was necessary to continue offering decent-quality items.
“Dollar stores chose to ask for a quarter more so they could keep providing full-sized, functional items, like a spatula that doesn't melt or a roll of paper towels that actually lasts more than a day,” Valadares added. “The price hike was necessary to protect the utility of the product and maintain their viability as a business.”
Dollar Tree has followed that logic by moving to a multi-price format.
Dollar Tree defends higher prices
Dollar Tree CEO Michael Creedon said customers actually like his chain's new higher prices during the company's fourth-quarter earnings call.
"We continue to see really strong customer acceptance for multi-price, particularly in that $3 to $5 range where the assortment expansion is driving incremental demand rather than substitution," he said.
The change has also led Dollar Tree stores to become more productive.
"With higher sales per square foot and larger basket sizes in those converted stores, the broadened assortment and the increased relevance really both benefit the customer. And then in terms of our associates, it's fewer things to put on the shelf. And so there's some nice productivity and our stores love it," he added.
Offering more price points, however, wasn't just a cash grab, he noted.
"And I want to be clear, though, that this is not simply about raising prices. This is about us having better items, larger pack sizes, the right pack sizes and categories that just weren't available to us at a strict dollar or even $1.25 price point. So even at those higher price points, we remain incredibly competitive with a better assortment," the CEO shared.
Todd Vasos, CEO of Dollar Tree rival Dollar General, noted that economic conditions have impacted his chain's customers.
“Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation. Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” Vasos said during Dollar General's fourth-quarter 2024 earnings call.