True Dollar Stores: Do Any Stores Still Charge $1 or Less?

The dollar store in America is a dying breed — and yet it’s more successful than ever.

How could that be? On the one hand, the dollar store is arguably the hottest category in the retail world. Dollar stores are on pace to account for an astonishing 40% of new stores opening this year in the U.S. And the three major dollar store chains — Dollar General, Family Dollar and Dollar Tree — already operate nearly 33,000 locations in North America, far more than Walmart, CVS, Target, Rite Aid and Costco combined.

At the same time, however, the phrase “dollar store” has increasingly become meaningless. For years, most dollar stores have featured products that cost more than $1. This week, Dollar Tree, the lone major holdout that priced the vast majority of items at $1 or less, announced it’s significantly expanding the number of products priced over $1.

In addition to its 6,000+ signature Dollar Tree stores, the company has been running over 100 locations operating under the Dollar Tree Plus brand name. These stores often have merchandise priced at $1, $3 or $5, and Dollar Tree plans on 500 of them being open by the end of 2021. Dollar Tree is also be breaking from $1-or-less tradition by testing more items priced at $1.25 or $1.50 at regular Dollar Tree stores.

“We believe testing additional price points above $1 for Dollar Tree product will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs,” Michael Witynski, Dollar Tree’s president and CEO, said in a press release.

Bargain-hungry shoppers may be disappointed by the move, but investors sure seemed to like Dollar Tree’s decision. The company’s stock price leaped 16% after the announcement was made on Wednesday, before retreating over 4% Thursday.

Meanwhile, Family Dollar — which was purchased by Dollar Tree in 2014 — has been selling items for over $1 for years. So has Dollar Tree’s main rival, Dollar General, which in this week’s circular is promoting goods like Android cell phones, Tide laundry detergent and Gorilla Glue for well over $1.

It’s understandable why dollar stores are charging more than $1. They want to offer one-stop shopping for customers, and it’s not feasible to price things like electronics, fresh produce and brand-name household staples for just a buck. When you add in high inflation and problems with the global supply chain in 2021, it would seem virtually impossible to run a profitable business that’s charging just $1 for a decent selection of products.