Recently, the infamous Dollar Tree has rebranded to Dollar Tree Plus, increasing its prices from $1.00 to $1.25. At first glance I assumed this was due to the inflation we have been facing. Inflation is at about 6.2% as of November which is a large increase from the 1.4% in January (trading economics). However, the company has spoken out that this is not the case. The permanent change “is not a reaction to transitory or short-term market conditions” (Forbes). These new prices are supposed to help reintroduce products that have been too expensive to stock in the past and additionally increase employee wages.
This led me to think about how Virginia’s Minimum wage incremental rise. I began to wonder about how many other states are experiencing this. In 2021, 24 U.S. states had a set increase in minimum wage. Which could easily shake up a company with such a fixed cost. However, with research I found they made $23.611B in 2020 which was an increase from previous years (macro trends). Increasing the price of items should aid in this growth. My thoughts are that with the changing state of our economy they want to be able to continue to have a rise in annual revenue, knowing people are not too worried about an increase of a quarter an item. I am not convinced the increase in inflation and minimum wages did not play a factor in the choice to increase, because as market conditions change, businesses must adapt in order to still grow and come out on top.
https://tradingeconomics.com/united-states/inflation-cpi
https://www.usnews.com/news/articles/best-states/minimum-wage-by-state
https://www.macrotrends.net/stocks/charts/DLTR/dollar-tree/revenue
"Five Below" did the same thing as well, going up to about 10$ sections I believe!