Dollar Tree’s costs are going up, but it still believes in the power of a buck

Discount chain Dollar Tree wagers it can manage pandemic-fueled inflation and still sling deals to customers at a buck by finessing its product offerings and cutting costs. But while demand for many products is high, The Wall Street Journal reports that manufacturing and transportation costs have gone up, along with the price of some raw materials and employee wages (70 percent of the chain’s workforce is part-time). Dollar Tree’s profit has grown more slowly than its competitors Walmart and Dollar General as customers spent more on food and household products rather than party supplies and knick knacks, which it stocks more expansively. But the corporation maintains that it’s all about the buck and says it doesn’t plan to disappoint its loyal, deal-seeking shoppers. Most of its products are store brands, with about a third from national labels. When suppliers raise prices on their items, the chain can simply replace them. They’ve also started shipping more items together in bulk, like their popular $1 gift bags, now shipped in boxes of 72 rather than 24, to save on costs. Customers are willing to take a price bump on certain items like seasonal décor—though not too high. On these items, Dollar Tree’s CEO says customers can expect to spend at most one crisp Abe Lincoln.