Will Its New $1.25 Price Hurt Dollar Tree?

On November 28 of this year, I posted an article entitled, “The End of Everything for $1. Dollar Tree Announces Its New Retail Price Point.” It was the latest in a series of articles I had written about Dollar Tree and how it was coping with inflation. My position was and is that Dollar Tree, with its fixed retail of $1, is the canary in the coal mine when it comes to inflation If Dollar Tree finally broke with its 37-year run of pricing everything in the store for $1, then we were in for significant changes in our traditional retail price points.

Well, of course, they did end their everything for $1 policy and moved to $1.25. I did some research, however, and they were not the first retailer to maintain a fixed price point for decades. The F.W. Woolworth Company, the inventor of the Five and Dime store, had a company policy mandating that everything in their store had to retail for either a nickel or ten cents.

Woolworth’s opened its first Five and Dime store in 1880. It maintained those price points until the 1930s, when it moved its top price to 20 cents and ended it entirely in 1935.

Woolworth continued in business for another sixty-two years, finally closing in 1997. Dollar Tree, like Woolworth, will continue to thrive and grow. Just as ten cents came and went as a strong price point, a dollar is doing so as well.

Someday, our grandchildren will grow up to tell their offspring about the days when you could visit a store full of things to buy and all for the cost of a dollar. Their children will shake their heads in disbelief and go out and spend, to us, unimaginable sums for what we buy for a single dollar.

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