Dollar Tree: Breaking the Buck

For thirty-five years, Dollar Tree, a discount retail chain selling general merchandise, had held its fixed price point steady, pricing all of its household items, food, stationery, books, seasonal items, gifts, toys, and clothing that made up its diverse and ever-changing assortment at $1.00. While all other dollar store chains had raised prices over the years to keep up with inflation, Dollar Tree had never budged on its price. However, in late 2021, the company announced that Dollar Tree was “breaking the buck” and raising prices on all goods to $1.25. Would the demise of the $1.00 price point bring about the downfall of Dollar Tree or could the retail chain weather its price change without alienating its price sensitive shoppers through smart marketing, pricing, and branding strategies?