Dollar Tree to offer $7 items, shifting away from single-pricing model

Dollar Tree store is seen in Chicago, United States, on October 17, 2022.

Last year, Dollar Tree announced it would raise prices above a dollar and add $3 and $5 price points in over 1,800 stores.

This year, customers could expect to pay even more, as the discount retail giant announced it will elevate its price cap and raise the highest price for specific items from $5 to $7.

"This expanded assortment will offer Dollar Tree shoppers a wider range of choices across a variety of categories," said CEO Rick Dreiling in a recent earnings call. "Over time, you will also see us fully integrate multi-price merchandise more into our stores so our shoppers will find $5 bags of dog food next to our traditional $1.25 pet treats and toys, and our $3 bags of candy will be found in the candy aisle. This is the next exciting chapter of the Dollar Tree value story: new items, more choices, and more savings."

He further mentioned that most items in the store will stay at the "entry-level fixed price point" of $1.25.

The increased prices were revealed shortly after Dollar Tree's announcement earlier this week regarding its intention to shut down nearly 1,000 stores of its subsidiary, Family Dollar. This decision comes in the wake of the subsidiary being fined over $40 million due to a rat infestation at one of its warehouses, leading to the temporary closure of hundreds of stores.

RELATED: Family Dollar, Dollar Tree to close about 1,000 stores

The chain has also previously been scrutinized by OSHA, the Occupational Safety and Health Administration, for unsafe conditions such as blocked exits and improper access to fire extinguishers.

Following the announcement of approximately 1,000 store closures, Dollar Tree reported a substantial quarterly loss.

Dollar Tree, the parent company of Family Dollar, revealed on Wednesday plans to close 600 Family Dollar stores within the first half of the year as part of its portfolio optimization strategy. The company also stated in its fourth-quarter earnings report that an additional 370 stores will close upon the expiration of their leases.