‘Sick to my stomach’: Dollar Tree fanatics protest new $1.25 prices

On Jan 16, 2022

Dollar Tree’s recent decision to end $1 prices after 35 years and raise most items at stores to $1.25 has elicited an angry response from many loyal customers on Twitter, Facebook, TikTok and YouTube.

Video bloggers with hundreds of thousands of followers posted videos of their reactions to the price hike — or entering a store for the first time and seeing Dollar Tree’s ubiquitous green and yellow “Everything’s $1” circles replaced with $1.25 signs.

A sign displaying $1.25 price is posted on the shelves of a Dollar Tree store in Alhambra, California, December 10, 2021.

Some shoppers have started derisively calling the chain “$1.25 Tree” and say it should change its name.

The criticism highlights the risks that Dollar Tree — the last of the big dollar store chains to actually sell nearly everything for a dollar — took when it abandoned its $1 brand identity.

“I wish they wouldn’t have done that because most of their shoppers are people who are not getting paid a lot of money,” said Leniza Costa, a beauty influencer in Pawtucket, Rhode Island, who is “known for always going” to Dollar Tree.

Costa won’t shop at Dollar Tree (DLTR) as often and instead will look to purchase $1 items at Walmart (WMT).

“This is the worst time to increase the price, when everything else is so much,” she said.

We won’t know for certain whether customers are turning their backs on Dollar Tree’s new prices until it reports its quarterly results in the coming weeks. But there are signs the move may be alienating some shoppers.

A weekly online survey of around 500 consumers by Coresight Research, a retail research and advisory firm, found a 6.2% drop from December 27 to January 3 in the number of customers who said they had bought non-food items at Dollar Tree compared to the prior two weeks. A steeper decline of 12.2% was recorded among shoppers ages 45 to 60. Other chains, including Walmart and Dollar General, did not see similar drops in the surveys.

Dollar Tree added the $1.25 prices to more than 2,000 stores in December (it has around 8,700 US stores), and Coresight said in a report that its “decline in shopper numbers appears to coincide with its price hike.” The firm cautioned against an “overreliance on a single week’s data point,” but said the latest figures “may reflect a shopper exodus on the back” of the price change.

“We have had a very positive response from the overwhelming majority of our customers around the $1.25 price point and the extreme value and broader product selection it has enabled, especially in these inflationary times,” a Dollar Tree spokesperson said in an email. “We look forward to providing more details on this initiative during our next earnings call.”

‘Our niche’

The $1 price was almost sacrosanct to Dollar Tree, which sells toys, home furnishings, kitchenware, holiday decorations, stationary, party supplies, arts and crafts, books, food, household essentials and other items.

Macon Brock, a Dollar Tree founder, said in his 2017 autobiography that “I viewed the dollar-only concept as sacred. It was everything. Without it, we’d be just another discount…