Flickr: Mike Mozart

Dollar Tree is Quietly Raising Prices Over $1

I remember the first time I visited Dollar Tree I was flabbergasted. What do you mean I can buy anything in here for a dollar? As a teen, I frequented the store to pick up essentials and when the holidays came around, I loaded up on stocking stuffers for the whole family to enjoy. However, the days of the $1 product promise might be over before we know it.

Unlike dollar-store chains like Family Dollar and Dollar General, every item in Dollar Tree Stores is only $1. Unfortunately, according to the Chesapeake, Va.-based retailer, it has been forced to test out higher prices due to Trump's latest tariff on Chinese goods. Currently, the price increase is taking place in 100 Dollar Tree stores across the country, raising some products to $5 in their Dollar Tree Plus! collection. 

According to Business InsiderDollar Tree manufactures about 40% of its product in China which allows large amounts of product to be sold at a very cheap price. "The tariffs are more difficult for Dollar Tree than rivals because the company has a one-dimensional business model that is not easily flexed or changed," Neil Saunders, the managing director of GlobalData Retail, recently told Business Insider in an email. Dollar Tree's business model focuses on keeping the products the same price, however, with added costs it is hard to find where the company can continue to make a profit. Businesses like Walmart or Target have the ability to hide these costs in their pricing, however Dollar Tree cannot.

The Washington Post states, "American families will pay nearly $800 more a year on everyday items, including cribs and toilet paper, as a result of the Trump administration's tariffs on Chinese imports, according to a report by the Trade Partnership, a Washington-based research-and-consulting firm." And it shows. The company also lowered its profit expectations for the year because of a $15 million increase in import freight costs.

The era of the dollar store may be soon over.

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