- Dollar Tree shares rose as much as 18% on Wednesday after it said it would start selling items priced above $ 1.
- Customers in Dollar Tree Plus stores will see products that sell for $ 3 to $ 5.
- The company has faced rising shipping and labor costs.
- See more stories on Insider’s company page.
Dollar Tree shares shot higher Wednesday after the discount retailer said it will start selling items priced at more than $ 1 each, a step that comes as the company handles cost pressures.
Shares of Dollar Tree rose as much as 18% to a one-month high of $ 101.43 and then trimmed the advance to 15%. Volume of nearly 20 million shares traded cut average daily volume of 2.8 million shares.
Dollar Tree Plus stores will sell products with price tags of $ 3 and $ 5 before the end of the fiscal year, the company said in a statement late Tuesday. Items priced at $ 1.25 and $ 1.50 will be added to shelves in some of its Dollar Tree stores with plans to extend testing of additional price points above $ 1.
The higher prices come as the company said it has received “positive customer response” and has registered success in its new Combo and Dollar Tree Plus store formats.
“For decades, our customers have enjoyed the ‘excitement of the hunt’ for value for a dollar — and we remain committed to the key proposal — but many tell us they also want a wider product range when they come to the store,” he said. Dollar Tree CEO Michael Witynski in Tuesday’s statement. The company began testing Dollar Tree Plus stores in 2019.
In August, Witynski addressed concerns about inflation and the rising costs of goods, shipping and labor.
“Shipping costs have reached unprecedented levels due to increased demand, limited capacity and delays in shipping,” he said during a conversation with analysts in the second quarter. Dollar Tree is “more sensitive” to shipping costs than other retailers that import products because it has focused on selling goods for $ 1, the CEO said.