Why Dollar Tree is raising prices quietly. Here's what it means for shoppers

Dollar Tree shifts beyond the classic “$1 store.” new price-point changes reflect inflation and supply-chain pressures

American discount-store chain Dollar Tree has quietly increased prices on many of its staple items by raising the base cost of goods to more than $1.

Dollar Tree is raising prices quietly REUTERS/Erin Scott(REUTERS)

According to the company's third-quarter earnings call on December 3, several items, such as cleaning supplies, household goods and everyday essentials, have had their tags changed to about $1.50 or higher and will remain as such.

Why is Dollar Tree raising prices?

The company’s shift toward a “multi-price” model isn’t new.

In 2021, Dollar Tree raised its price from $1 to $1.25 and began widening its range to include items priced up to $7.

In a 2025 analysis, Reuters reported that Dollar Tree’s third-quarter profit was hit by “tariff shock,” which squeezed margins even as demand remained steady. The piece notes that the company warned of cost pressures from import duties and related freight/ supply-chain disruption.

According to the same report, Dollar Tree’s CEO said tariffs remain “a source of ongoing volatility,” prompting the retailer to adapt, raising some prices and revising sourcing to offset the burden.

Dollar Tree reported a 9.4 per cent increase in net sales and surpassed market estimates for adjusted profits in 2025, crediting its expanded price-point strategy for better absorbing cost pressures.

The 2025 earnings report (Q3) shows Dollar Tree has shifted more products to higher price points and acknowledged that “freight, higher discretionary-sales mix … tariff mitigation … helped drive profitability.”

Business Insider coverage notes that some items previously priced at $1.25 are now being relabelled at $1.50.

Dollar Tree’s CEO has defended the new pricing structure, saying the company remains committed to affordability, while striving to deliver “value, convenience and discovery” through a broader assortment and flexible pricing.

What this means for shoppers?

Even small price increases from $1.25 to $1.50 or more can undermine the store's initial value proposition for many loyal Dollar Tree customers, particularly those on a tight budget.

The cost of necessities like cleaning supplies, kitchenware, and snack packs has increased dramatically, making customers reconsider whether the savings are still worthwhile.

Many households, even those with middle-class incomes, are reconsidering their spending due to consumer price pressures across the board, particularly in food and everyday goods.

According to the Q3 report, Dollar Tree added about 3 million new households, of which roughly 60% were from households earning more than US $100,000 annually. The company’s CEO described higher-income customers as a “meaningful growth driver.”

This signals a certain level of economic stress among lower-income groups as well as across middle- and high-income households. The very factor is driven by inflation, rising living costs and uncertainty. As a result, even well-off households are “trading down” to value-priced goods.

Barron's reported that this trend is part of a wave of “value-seeking behaviour across all income groups,” noting that discount stores are benefiting from what’s being called an “affordability crisis.”

Discount retail resurgence with increased cost

Dollar Tree posted a net sales of $4.75 billion this year and reported adjusted earnings of $1.21 per share.

Following that performance, Dollar Tree raised its full-year fiscal 2025 profit forecast. The adjusted earnings per share guidance was raised to $5.60–$5.80, up from earlier guidance of $5.32–$5.72.

The increase in net sales outlook to $19.35 billion implies a projection of sustained demand for its products even in inflationary times.