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Dollar Tree makes it official: Items will now cost $1.25

In this Feb. 25, 2021 photo, Dollar Tree store logos indicating that everything in the store is for $1 are promoted on its storefront window in Jackson, Miss. Dollar Tree, the national chain of stores that promises everything from a buck, will begin introducing items on its shelves that will exceed $1. The company said, Wednesday, Sept. 29, that it's responding to customer requests and said pushing the $1 barrier will allow for a better mix of products. (AP Photo/Rogelio V. Solis)
In this Feb. 25, 2021 photo, Dollar Tree store logos indicating that everything in the store is for $1 are promoted on its storefront window in Jackson, Miss. Dollar Tree, the national chain of stores that promises everything from a buck, will begin introducing items on its shelves that will exceed $1. The company said, Wednesday, Sept. 29, that it's responding to customer requests and said pushing the $1 barrier will allow for a better mix of products. (AP Photo/Rogelio V. Solis) In this Feb. 25, 2021 photo, Dollar Tree store logos indicating that everything in the store is for $1 are promoted on its storefront window in Jackson, Miss. Dollar Tree, the national chain of stores that promises everything from a buck, will begin introducing items on its shelves that will exceed $1. The company said, Wednesday, Sept. 29, that it's responding to customer requests and said pushing the $1 barrier will allow for a better mix of products. (AP Photo/Rogelio V. Solis)

By Associated Press 2 min read

NEW YORK (AP) – Faced with the rising cost of goods and freight, discount retail chain Dollar Tree said Tuesday it will be raising its prices to $1.25 for the majority of its products.

Dollar Tree said the reason for raising its prices to $1.25 was not due to “short-term or transitory market conditions” and said the price increases were permanent. The higher prices will also allow the company to cope with high merchandise cost increases as well as higher operating costs, such as wages, it said.

“(Dollar Tree) believes this is the appropriate time to shift away from the constraints of the $1.00 price point in order to continue offering extreme value to customers,” the company said in a statement.

Dollar Tree was one of the last true “dollar stores” after most of its competition had moved away from that price point.

The company, which is based in Chesapeake, Virginia, said in September it was testing the higher prices at select stores. On Tuesday, it said it will introduce the new price point in more than 2,000 additional Dollar Tree stores in December and complete the rollout to all its stores by early next year. The company has about 8,000 Dollar Tree stores.